The New Jersey Economic Development Authority (EDA) has adopted amendments to the rules implementing the Technology Business Tax Certificate Transfer Program (Program) in order to clarify certain terms and provisions related to Program eligibility.
The Program allows approved, unprofitable New Jersey-based technology and biotechnology businesses with fewer than 225 employees to sell their unused net operating loss carryovers and unused research and development tax credits to unaffiliated, profitable corporate taxpayers in New Jersey for at least 80 percent of the value of the tax benefits (subject to certain other limitations). In addition, among other requirements, a technology or biotechnology business must own, have filed for or have a license to use protected proprietary intellectual property.
The amendments to the Program’s rules modify the definition of “full-time employee” to include persons employed on a permanent or indefinite basis and to include persons who are employed under a formal written agreement with an institution of higher education under which the institution’s students are employed on a permanent basis in a single position that complies with all other requirements for qualifying as a full-time employee. This definition was further amended to exclude interns, temporary employees and persons employed in temporary positions from the definition of “full-time employee.”
Also modified under the amendments are the definitions of “license” and “protected proprietary intellectual property” to clarify that the license of protected proprietary intellectual property must be an exclusive license and that the protected proprietary intellectual property must be intellectual property that is the technology of the applicant’s primary business. However, the applicant’s primary business must be either technology or biotechnology.
Additionally, the amended rules add a requirement that the application for the Program must be filed with the EDA on or before June 30 of the program cycle year.
The amendments took effect on August 5, 2013.
Click here for the text of the amendments.