Wednesday, May 29, 2013

MN Angel Tax Credits Run Out for 2013

In recent posts, my colleagues, here and here, and I have provided updates on the status of the Minnesota Angel Tax Credit.  As of early-May, according to the Minnesota Department of Economic Development’s (DEED) website, all $12.7 million of the tax credits available for issuance in 2013 had been exhausted.

There was some hope that the Minnesota legislature would allocate additional credits for 2013 in this session’s tax bill.  Indeed, there was at least one proposal to increase the tax credits available for issuance this year.  However, the tax bill that the legislature approved at the end of the session on May 20th, and which the governor signed, did not include an increase for tax credits this year.

The legislature did approve an allocation of $12 million for calendar year 2014.  Given the pace at which tax credits have been allocated the past two years, I think we can assume that the $12 million of tax credits available for 2014 will be exhausted by the time the snow melts next spring in Minnesota. (Jeff Nelson, the angel tax credit program’s coordinator, speculates that they will run out of credits by April.)  So, if you are planning to raise capital next year, and hope your investors will be able to take advantage of the tax credit, you will need to get in line early.  DEED will begin accepting applications for the 2014 angel tax credit in November this year.

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