“The Minnesota House and Senate Monday overwhelmingly approved a five year, $50 million tax credit designed to spur early stage investment in high tech start-ups, including biotechnology and medical devices.
Minutes after the House passed a job bill, which included the angel credits, 112-20, the Senate followed suit 58-3. The lopsided vote capped an epic, seven year struggle to make Minnesota more competitive with neighboring states like Wisconsin, whose generous angel credits had lured homegrown start-ups across the border.”
What will the Angel Investment Tax Credit do?
According to sources familiar with the matter (MOJO MN), there may still be amendments, however here is the gist of it:
The Angel Investor Tax Credit has been discussed and debated for years at the Capitol, but is finally on its way to becoming law. The bill provides for a 25% tax credit for Angel Investment, to a maximum of $125,000 in tax credits per year/per investor. The bill budgets $11 million in credits for 2010, with $12 million in credits for 2011 through 2014. This tax credit is scheduled to sunset in 2015. The R&D tax credit increased from 5% to 10% of the first $2.5 million in R&D investment. In addition, the R&D credit is now expanded beyond “C” corporations to partnerships and “S” corporations. The R&D tax credit is refundable if a business’s tax liability is less than its credit due. The tax credits in the bill were offset by an elimination of a low-income motor fuels tax. This tax was part of the 2008 transportation bill containing the gas tax increase. The state has not yet issued any refunds under this program.