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

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


The Commonwealth of Massachusetts



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.






Claire D. Cronin

11th Plymouth

Michael D. Brady

9th Plymouth

Frank A. Moran

17th Essex

Martin J. Walsh

13th Suffolk

Thomas J. Calter

12th Plymouth

Tricia Farley-Bouvier

3rd Berkshire

Mary S. Keefe

15th Worcester

Christine E. Canavan

10th Plymouth

Leonard Mirra

2nd Essex

James J. Dwyer

30th Middlesex

Josh S. Cutler

6th Plymouth

Jeffrey N. Roy

10th Norfolk

Marjorie C. Decker

25th Middlesex

Danielle W. Gregoire

4th Middlesex

Brian R. Mannal

2nd Barnstable

Diana DiZoglio

14th Essex

Louis L. Kafka

8th Norfolk

Alan Silvia

7th Bristol

Aaron Vega

5th Hampden

Angelo J. Puppolo, Jr.

12th Hampden

Shaunna O'Connell

3rd Bristol

Tackey Chan

2nd Norfolk

Bruce J. Ayers

1st Norfolk

Antonio F. D. Cabral

13th Bristol

Marcos A. Devers

16th Essex

Benjamin Swan

11th Hampden

Thomas A. Golden, Jr.

16th Middlesex

Thomas M. Stanley

9th Middlesex

Paul A. Schmid, III

8th Bristol

Keiko M. Orrall

12th Bristol

Kathi-Anne Reinstein

16th Suffolk

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

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.

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