Minnesota angel investor tax credits are moving



Minnesota’s Angel Investor Tax Credit program has turned a new leaf this year with a fresh round of tax incentives available for investors who fund qualified Minnesota tech companies.

Passed in the spring of 2010 as part of the broader Jobs Bill ( H.F. 2695), the legislation aims to stimulate economic development within Minnesota through a 25% refundable tax credit for angel investors.

A $60m budget was reserved for five year period. $4m rolled over into 2011, as $16m was allocated the first full year of 2011; last year, the funds evaporated in the mid July.  A total of $12.7m in credits is available for the year 2013, with $1.3 m already claimed as of January 17th.

“There was definitely some pent up demand,” says Jeff Nelson from the Minnesota Department of Economic Development (DEED).

Nelson estimates that the credit could run out as early as spring, pointing to the 75 businesses which have been certified this year, in combination with the allocation rate. On the flip side, only 65 investors have been certified in 2013, considering there were 511 by the end of last year.

“The way that it usually works is that the company will be certified first and then the investors will follow,” Nelson notes.

Rep. Keith Downey proposed amendments to the statute last March, which included a provision to raise the annual cap to $20m, amongst other aspects.