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TECHNOLOGY BUSINESS TAX CERTIFICATE TRANSFER (NOL) PROGRAM


The Technology Business Tax Certificate Transfer Program enables qualified, unprofitable NJ-based technology or biotechnology companies with fewer than 225 US employees (including parent company and all subsidiaries) to sell a percentage of net operating losses (NOL) and research and development (R&D) tax credits to unrelated profitable corporations.

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DOLLAR AMOUNT

Net operating losses and R&D tax credits may be sold for at least 80% of their value, up to a maximum lifetime benefit of $15 million per business

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BENEFITS

Ability to turn NOL and R&D tax credits into capital
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Can be used for growth and operations, including working capital or to fund research


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TARGET APPLICANTS

Technology and biotechnology companies whose primary business involves the provision of a scientific process, product or service are eligible

APPLICATION

APPLICATION

APPLICATION DEADLINE: Wednesday, June 30th 2021 11:59 pm – Application will go live around the beginning of May. 

Application and application fee must be submitted via the online application. No other form of application and payment will be accepted for entry into the program. NJEDA must receive completed application by deadline. The application will not be considered submitted until you receive the confirmation message at the end of the application. Please retain this confirmation in the event that it is needed.

PROGRAM DETAILS

PROGRAM DETAILS

  • Up to $60 million is available annually, with $10 million set aside for businesses located in Innovation Zones (any unused balance of the $10 million set-aside is reverted to the general program pool)
  • Only technology and biotechnology companies whose primary business involves the provision of a scientific process, product or service are eligible
  • An eligible company must own, have filed for, or have a license to use protected, proprietary intellectual property (defined as a patent or a registered copyright)
  • An eligible company cannot have had positive net operating income on either of its last two full-year income statements according to GAAP.   In addition, an eligible company cannot have a parent company with positive net operating income, or be part of a consolidated group of affiliates for federal income tax purposes with positive net operating income
  • An eligible company must have at least one full-time employee working in New Jersey if incorporated or formed less than three years, five full-time employees in New Jersey if incorporated or formed more than three years but less than five years, or 10 full-time employees in New Jersey if incorporated or formed more than five years
  • An eligible company must have financial statements for the two most recent full years of operation compiled, reviewed or audited by an independent CPA firm and prepared according to US GAAP.

FEES

FEES

Application fee: $2,500

**All fees are non-refundable

The closing process for participation in the Technology Business Tax Certificate Transfer Program is a multi-step process as outlined below:

Step 1

Please be sure to stop and read all the steps below in order to ensure alignment for the 2020 process. We added a closing checklist to the website documents for your convenience.  This checklist is optional and for your internal use only.  Do not send this checklist to Closing Services.

Step 2

Sellers and Buyers apply for current Business Assistance or Incentive Clearance Certificate (issued to NJEDA as the agency) here: https://www16.state.nj.us/NJ_PREMIER_EBIZ/jsp/home.jsp

Please be advised that the Division of Taxation will be performing an additional review of your tax record at the time of issuance of the tax transfer certificate.  You should ensure continued compliance with your tax obligations.

Download and save the following secured PDF 2020 documents as instructed in Step 3 below:

1. Agreement;
2. Buying Business Information Sheet;
3. Selling Business Tax Benefit Identification Form;
4. Private Financial Assistance Form;
5. If you were authorized to sell and did sell tax benefits in a prior year, a Spending Certification Form
6. Exhibit “NOL Employee Closing Certification Log”; and
7. Seller’s Closing Certificate


Previous years documents will not be accepted and will result in delays in processing the transaction.

Step 3

Complete and sign the documents using Adobe “Fill and Sign” option (or print, and have the documents manually signed, then scanned). Note: manual signers must upload Valid Identification to the secure site called “File Request from Closing Services NOL Identification Upload at NJEDA” here: https://njeda.sharefile.com/r-r8cff71307f4f4132aba403efb4d7d4fd.
 
Save with the Sellers name in the file name (Ex. ABC Corp Agreement; ABC Corp. Selling Business Information Sheet). https://helpx.adobe.com/acrobat/using/fill-and-sign.html

We strongly suggest that prior to submitting the closing document package to Closing Services, it be reviewed for accuracy, version and completeness.  Any incorrect or missing information will delay the processing of the transaction.
  
Step 4

Email the completed and signed PDF documents, along with Seller and Buyer Current Tax Clearance Certificates, to the Authority at: nolclosingservices@njeda.com. Incomplete packages will be returned, causing a delay in processing.

Status Update:  Closing Services will provide a confirmation of receipt email when a Closing Officer is assigned to process an individual transaction.  If you have multiple transactions as a Seller or Buyer, you may have different Closing Officers assigned to each.  We will make every attempt to avoid this.

Step 5

The Authority will review the submitted documents for accuracy and forward approved documents to the New Jersey Division of Taxation (“Taxation”) for review and request issuance of the State of New Jersey Corporation Business Tax Benefit Transfer Certificate (“Tax Certificate”).

Status Update:  Closing Services will provide an email notice to the Seller when the closing package has been delivered to Taxation for processing.

Taxation reviews submitted documents and, if approved, forwards the electronic Tax Certificate to the Authority.
The Authority forwards the electronic Tax Certificate to the Seller/Consultant via email for signatures, read receipt requested.  Taxation is copied on the transmittal email for chain of possession purposes.

Step 6

Seller/Consultant receives the electronic Tax Certificate from the Authority and forwards it to the Seller and Buyer for execution and copies nolclosingservices@njeda.com and TaxIncentives.OLAD@treas.nj.gov on every email containing/transmitting the electronic Tax Certificate.

Note: Sale must be completed within ten (10) business days of receipt by Seller of the electronic Tax Certificate.
The date the funds are transferred from the Buyer to the Seller is the Date of Closing.
 
Step 7

Within one (1) business day of the sale, Seller/Consultant must complete and return the following to the Authority at nolclosingservices@njeda.com and copy TaxIncentives.OLAD@treas.nj.gov.

Fully Executed electronic Tax Certificate*
Fully Executed Completed Exhibit “NOL Employee Closing Certification Log” dated the Date of
Closing Fully Executed Seller’s Closing Certificate dated the Date of Closing
*Manual Signers: Valid Identification of Certificate Signatories must be uploaded at File Request from Closing Services NOL Identification Upload at NJEDA here: https://njeda.sharefile.com/r-r8cff71307f4f4132aba403efb4d7d4fd. If this step is not completed there will be a delay in process.
 
Step 8

Upon review and approval of the above documents, the Authority will notify all parties via email that the electronic Tax Certificate has been deemed valid. The Tax Certificate is not “valid” until the Authority declares it validity in writing.
 
Step 9 – Post Closing  

Fully executed completed electronic 2020 Corporation Business Tax Benefit Transfer Certificate (both sides) must be printed and manually sent to:
CBT Refunds/Tax Credit
PO Box 259
Trenton, NJ 08695-0259

STATUS UPDATES:

Status Updates will be provided as a courtesy by Closing Services as the transaction moves through the closing and certificate issuance process. The Status Updates will be the only method of communication in order to keep the Seller informed of the progress while allowing for an efficient and timely closing for all.  If the Closing Officer has any concern or question regarding the submitted package, they will either initiate a call or email the appropriate party.

If you have a question or concern other than where the transaction is at a given time, you must send  your question to nolclosingservices@njeda.com with the subject line:  Question regarding (name of Seller)  Product #.    There may be delays for inquiries without the appropriate information in subject line of the email.

 If Closing Services has a question or concern regarding a submitted package, the Closing Officer will initiate contact with the appropriate party. We appreciate your cooperation while we work together to close these transactions as quickly and accurately as possible.



1. Agreement;
2. Buying Business Information Sheet;                                                                                   
3. Selling Business Tax Benefit Identification Form;
4. Private Financial Assistance Form;
5. If you were authorized to sell and did sell tax benefits in a prior year, a Spending Certification Form
6. Exhibit “NOL Employee Closing Certification Log”; and
7. Seller’s Closing Certificate
8. Steps to Closing Checklist