HOUSE DOCKET, NO. 2691        FILED ON: 1/18/2013

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2536

 

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Claire D. Cronin

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to angel investor tax credits.

_______________

PETITION OF:

 

Name:

District/Address:

Date Added:

Claire D. Cronin

11th Plymouth

 

Michael D. Brady

9th Plymouth

1/28/2013

Frank A. Moran

17th Essex

 

Martin J. Walsh

13th Suffolk

 

Thomas J. Calter

12th Plymouth

1/28/2013

Tricia Farley-Bouvier

3rd Berkshire

1/30/2013

Mary S. Keefe

15th Worcester

1/30/2013

Christine E. Canavan

10th Plymouth

1/28/2013

Leonard Mirra

2nd Essex

1/28/2013

James J. Dwyer

30th Middlesex

1/29/2013

Josh S. Cutler

6th Plymouth

1/29/2013

Jeffrey N. Roy

10th Norfolk

1/30/2013

Marjorie C. Decker

25th Middlesex

1/31/2013

Danielle W. Gregoire

4th Middlesex

1/28/2013

Brian R. Mannal

2nd Barnstable

1/30/2013

Diana DiZoglio

14th Essex

2/1/2013

Louis L. Kafka

8th Norfolk

 

Alan Silvia

7th Bristol

1/30/2013

Aaron Vega

5th Hampden

1/29/2013

Angelo J. Puppolo, Jr.

12th Hampden

 

Shaunna O'Connell

3rd Bristol

1/29/2013

Tackey Chan

2nd Norfolk

 

Bruce J. Ayers

1st Norfolk

1/31/2013

Antonio F. D. Cabral

13th Bristol

2/1/2013

Marcos A. Devers

16th Essex

1/30/2013

Benjamin Swan

11th Hampden

1/30/2013

Thomas A. Golden, Jr.

16th Middlesex

2/1/2013

Thomas M. Stanley

9th Middlesex

1/31/2013

Paul A. Schmid, III

8th Bristol

2/1/2013

Keiko M. Orrall

12th Bristol

2/1/2013

Kathi-Anne Reinstein

16th Suffolk

2/6/2013

Ryan C. Fattman

18th Worcester

 

Peter J. Durant

6th Worcester

 

Michael A. Costello

1st Essex

 

Michael O. Moore

Second Worcester

 

Cory Atkins

14th Middlesex

 

John H. Rogers

12th Norfolk

 

Rhonda Nyman

5th Plymouth

 

Bruce E. Tarr

First Essex and Middlesex

 

David M. Nangle

17th Middlesex

 

William C. Galvin

6th Norfolk

 

Mark J. Cusack

5th Norfolk

 

Angelo L. D'Emilia

8th Plymouth

2/7/2013


HOUSE DOCKET, NO. 2691        FILED ON: 1/18/2013

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2536

By Ms. Cronin of Easton, a petition (accompanied by bill, House, No. 2536) of Claire D. Cronin and others for legislation to create tax credits for investments in certain businesses.  Revenue.

 

The Commonwealth of Massachusetts

 

_______________

In the Year Two Thousand Thirteen

_______________

 

An Act relative to angel investor tax credits.

 

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 6 of chapter 62 of the General Laws is hereby amended by adding the following subsection:-

(s)(1) As used in this subsection, the following words shall have the following meanings:-

“Gateway municipality”, a gateway municipality as defined in section 3A of chapter 23A.

“Qualifying business”, a business which: (a) has its principal place of business in Massachusetts; (b) has 50 per cent of its employees located in the business’s principal place of business; (c) has a fully developed business plan that includes all appropriate long and short term forecasts and contingencies of business operations, including research and development, profit, loss and cash flow projections and details of angel investor funding; (d) employs 20 or fewer full-time employees at the time of taxpayer investor’s initial qualifying investment as provided for in paragraph (2); (e) has a Massachusetts tax identification number; and (f) has gross revenues equal to or less than $500,000 in the fiscal year prior to eligibility.

“Qualifying investment”, an investment that is at risk and not secured or guaranteed; provided, however, that a qualifying investment shall not include, venture capital funds, hedge funds and commodity funds with institutional investors or investments in a business involved in retail, real estate, professional services, gaming or financial services.

“Taxpayer investor”, accredited investors, as defined by the United States Securities and Exchange Commission pursuant to section 2(15)(ii) of the Securities Act of 1933, 15 U.S.C. section 77b(15)(ii)), and who is not the principal owner of the qualifying business who is involved as a full-time professional activity.

(2) A taxpayer investor who makes a qualifying investment in a qualifying business may, take a credit against the taxes imposed by this chapter in an amount equal to 20 per cent of the amount of investment on a qualifying business.  Taxpayer investors may invest up to $125,000 per qualifying business per year with a $250,000 maximum for each qualifying business.

(3) A taxpayer investor who makes a qualifying investment in a qualifying business with its principal place of business located in a gateway municipality shall be allowed a credit against the taxpayer investor’s income tax due in the amount of 30 per cent of a qualifying investment.

(4) Qualifying investments may be used by a qualifying business for the following purposes: (a) capital improvements; (b) plant equipment; (c) research and development; and (d) working capital.  Qualifying investments shall not be used to: pay dividends, repay shareholders’ loans, redeem shares or repay debt.

(5) The credits allowed under paragraph (2) or (3) may be taken in each year for a 3 year period. Alternatively, the credits shall be allowed against income tax due in either the tax year of the initial investment or in each year for such 3 year period. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 2 subsequent taxable years. If the qualifying business ceases to have its principal place of business in Massachusetts within such 3 year period, the taxpayer investor shall not claim any further credits.

SECTION 2. The provisions of section 1 of this act shall be applicable to tax years commencing after December 31, 2012.