Recent Regulations and Resources

Learn about new rules, resources, and upcoming changes that may effect your business

Net Operating Loss (NOL) Program

Updated:
June 2, 2021

Applications are due June 30, 2021.

The Net Operating Loss (NOL) Program enables early-stage technology and life sciences companies in the Garden State to sell their New Jersey net operating losses and unused research and development (R&D) tax credits to unrelated profitable corporations for cash. Hailed as a lifeline for companies that have not yet reached profitability, the capital raised through this program can be used for costs including, but not limited to, the expenses of fixed assets, such as the construction, acquisition and development of real estate; materials; start-up; tenant fit-out; working capital; salaries; and R&D expenditures.

In addition to being vital to emerging companies, the NOL Program also provides enormous benefits to the profitable companies that are buying the net operating losses and unused R&D tax credits. A profitable company can purchase tax credits at a discount, based on the market price at the time. These tax credits have traditionally traded somewhere between 88 and 94 cents on the dollar. Once purchased, the tax credits can then be applied to reduce the buyer’s state tax obligation. Entities interested in becoming a buyer through the NOL Program can visit the website http://www.njeda.com/nol or reach out via email nol@njeda.com for more information.

The NJEDA hosted an informational webinar on the program on Tuesday, May 18th 2021. A recorded version of the webinar is available on the NJEDA’s webpage.

The NOL Program was expanded in January 2021 under the New Jersey Economic Recovery Act of 2020. The Economic Recovery Act increased the program’s annual cap from $60 million to $75 million and increased the lifetime cap for an individual applicant from $15 million to $20 million.

Source:

NJEDA