Thursday, June 23, 2011

A Government Shutdown…What Does It Mean for Entrepreneurs and Angel Tax Credits?

Much has already been written about the possible impact of the looming state government shutdown in Minnesota if a budget deal isn’t reached between the governor and the legislature. Of course, we have been thinking about what it may mean to our entrepreneurial clients as well. We know a shutdown will eliminate access to the office of the Secretary of State and its services. This will make it impossible to make filings on behalf of new or existing entities in this state. It also means a whole host of other services having a direct potential impact on businesses (detailed here) will be suspended.

So what does this mean for the state’s relatively new Angel Tax Credit Program?

The program gives a 25% refundable tax credit to individuals and funds that invest in qualifying technology businesses. There were some recent amendments made to the program in an attempt to make it easier for companies and investment funds to participate.

In a recent email to businesses certified for angel tax credit, the Minnesota Department of Employment and Economic Development (DEED) indicated that the Angel Tax Credit Program would be suspended during a shutdown. Our experience is that DEED has been working hard to make the program work and, typically, has been delivering notices far in advance of the deadlines required by the law. In the email, DEED has promised to use its best efforts to process all allocation requests received by June 24 before the threatened shutdown occurs next week.

Since the program requires an allocation prior to making a qualifying investment, entrepreneurs and investors should either act quickly to make their allocation requests or be prepared for a wait while the gridlock at the state capitol gets resolved.

1 comment :

  1. Just wanted you to know I've been reading all the blog posts Dan! Really think you guys are doing a great job with them, and hope that others are finding there way here too!!