By Joshua Burd
Businesses that locate near New Jersey’s colleges and universities and form research partnerships with the institutions can now qualify for enhanced tax credits under the Grow New Jersey program, the state Economic Development Authority said Thursday.
Under a newly implemented provision, such businesses can qualify for a base tax credit of up to $5,000 per job, per year, if they engage in what the authority deems to be a qualified collaborative research agreement. To help spur those partnerships, the EDA has created what it calls Garden State Create Zones, which it defines as a business in a targeted industry whose facility is located at or within three miles of one of New Jersey’s eight doctoral universities.
The facility must be used to conduct research with the college or university, subject to EDA criteria, according to a news release. The eight doctoral universities include Montclair State University, New Jersey Institute of Technology, Princeton University, Rowan University, Rutgers University New Brunswick, Rutgers University Newark, Seton Hall University and the Stevens Institute of Technology.
The EDA is also offering a bonus tax credit of $1,000 per job, per year, for businesses in a targeted industry whose facility is located at or within three miles of a New Jersey college or university other than the eight doctoral schools. The facility must also be used to conduct a qualified collaborative research relationship with that university.
There are 40 institutions that meet the definition, the EDA said.
“These enhancements to the Grow New Jersey Program will establish a wider pathway to discovery by facilitating research relationships between the brightest minds in industry and academia,” said Timothy Lizura, the EDA’s president and chief operating officer. “By cultivating an environment where this joint research can operate and thrive, we will ensure that New Jersey stays at the forefront of innovation.”
The EDA said it will evaluate prospective research partnerships based on the ability to meet one of four categories:
- Direct university collaboration or joint initiative or participation wherein the college or university partners with the business, and may include other business in a similar field of science, to advance an area of science;
- Sponsored research wherein the eligible business directly funds a college or university and pays for research to solve a specific problem;
- Grants or fellowships wherein funding is provided directly by a business to a professor or graduate student to advance a specific area of science;
- Corporate sponsored awards for entrepreneurship wherein a business sponsors an award to be given to a student-developed technology startup or innovation
The authority said the Grow New Jersey incentive will not be available for existing research agreements that have been executed prior to application. Officials added that, once a project application is approved by the EDA, the prospective agreement must be executed and research demonstrating advancement before the business can ultimately claim the increased tax credits.