Bill > H2473

This bill establishes new tax credits for "angel investors," which are accredited investors who are not principal owners of a business, when they make a "qualifying investment" in a "qualifying business." A qualifying business is defined as a business with its principal place of business in the Commonwealth, at least 50% of its employees located there, a developed business plan including details of angel investor funding, 20 or fewer full-time employees at the time of investment, a federal tax ID, and gross revenues of $500,000 or less in the prior fiscal year. A qualifying investment is a monetary investment that is at risk and not guaranteed, excluding investments in venture capital, hedge funds, commodity funds with institutional investors, or businesses in retail, real estate, professional services, gaming, or financial services. Taxpayer investors can receive a 20% tax credit on their qualifying investment, or a 30% credit if the qualifying business is located in a "gateway municipality," which is a specific type of municipality defined elsewhere in the law. There are limits on how much an investor can invest per business and the total tax credit they can receive annually, and these credits can be carried forward for three years, but must be repaid if the business moves its principal location out of the Commonwealth within that period. The total amount of these tax credits is capped annually, and the Executive Office of Housing and Economic Development will administer the program and allocate credits to promote job creation and maintenance.