Expanding Tax Credits for R&D, Tech Commercialization Among Govs' Priorities in NJ, LA

Recognizing the value in supporting companies that innovate to create high-quality jobs, governors in New Jersey and Louisiana recently outlined proposals to enhance tax incentives for R&D, technology commercialization, and transferable tax certificates during the upcoming legislative sessions. In New Jersey, Gov. Chris Christie proposed increasing the R&D tax credit to 100 percent and restoring full funding for the Technology Business Tax Certificate Transfer program as part of his FY12 budget recommendations. Louisiana Gov. Bobby Jindal announced his intentions to work with the legislature to extend and enhance two innovation-related tax incentives — the R&D tax credit and the Technology Commercialization Credit/Jobs Program — when the session convenes in April.
New Jersey

Gov. Chris Christie's FY12 spending plan provides funding to increase the state's R&D tax credit and restore full funding for the Technology Business Tax Certificate Transfer program. To capitalize on the state's fastest growing sectors of the economy such as life sciences, Gov. Christie proposed an increase in the R&D tax credit for corporations to 100 percent, up from 50 percent beginning in FY12. Additionally, the governor would restore full funding ($60 million) for the Technology Business Tax Certificate Transfer program, which was cut in half last year to help fill the budget deficit (see the July 14, 2010 issue of the Digest). The program allows promising technology and biotechnology companies that currently are not turning a profit to sell unused tax credits and use the capital for equipment, facilities, or other allowable expenses. Read the governor's FY12 budget summary: http://www.nj.gov/treasury/omb/publications/12bib/BIB.pdf.
Louisiana

Gov. Bobby Jindal announced his intentions to work with the legislature to extend and enhance two innovation-related tax incentives — the R&D tax credit and the Technology Commercialization Credit/Jobs Program — when the session convenes in April. Both programs would be extended six years and enhanced by changing the structure from a refundable credit to a rebate. The R&D credit provides up to a 40 percent refundable tax credit for qualifying R&D businesses activities and enables recipients of SBIR awards to receive a tax credit worth 40 percent of their award. Similarly, recipients of the technology commercialization credit receive tax credits of 40 percent on business investments related to commercialization activity. The governor also plans to work with lawmakers to introduce legislation to improve the Digital Media Tax program, which is available for video game development, software development and digital media products. Read the governor's press release: http://www.gov.state.la.us/index.cfm?md=newsroom&tmp=detail&catID=2&articleID=2706&navID=12.