Minnesota’s Angel Tax Credit: "Proprietary Technology" Requirement

Minnesota’s Angel Tax Credit (defined in Minn. Stat. 116J.8737) provides an array of investors who are natural persons1 the opportunity to receive a 25-percent individual income tax credit (maximum $125,000 per year per individual or $250,000 for those filing jointly) for investing in small businesses that are primarily focused on technological innovation.

To qualify for the credit, both the investors and the invested-in entity must meet certain requirements. The Minnesota Department of Employment and Economic Development ("DEED") website2 lists the basic business criteria for qualification3, and generally requires that the business be headquartered in Minnesota, have fewer than 25 employees and a minimum of 51 percent of employees and 51 percent of payroll in Minnesota. There are other qualification requirements for the investors.

Stuart R. Hemphill

Bridget Hayden

Full Story: http://www.dorsey.com/eu_ip_angeltaxcredit_11911/