Businesses need to meet these criteria to participate in the Angel Tax Credit program:
In addition, qualifying businesses need to be engaged in -- or be committed to engage in -- technological innovation in Minnesota. The primary business activity must include one or more of the following:
Proprietary Technology refers to technical innovations that are unique and legally owned or licensed by a business, including innovations that are patented, patent pending, a subject of trade secrets, or copyrighted.
Qualified high-technology fields include, aerospace, agricultural processing, renewable energy, energy efficiency and conservation, environmental engineering, food technology, cellulosic ethanol, information technology, materials science technology, nanotechnology, telecommunications, biotechnology, medical devices, pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, or similar.
These types of businesses that may not participate in the Angel Tax Credit program:
Certain professional services firms are also excluded from participating, including:
Before submitting an application, complete the Business Certification Checklist to self-determine your eligibility for the Angel Tax Credit Program.
Applying for the Angel Tax Credit is a four-step process. Steps 1-2 must be approved before a qualifying investment is made.
Submit a 2014 Business Certification Application along with the required $150 nonrefundable filing fee to MN DEED. Here's what happens next:
After certification, the business and investor jointly complete a 2014 Credit Allocation Application. Here's what happens next:
Within 15 days of the investment transaction, the business submits a Proof of Investment Form along with the following documentation:
1. A copy of the underlying transaction document (e.g., a signed investor/subscription agreement)
2. A copy of the investor’s or fund’s wire transfer or check made out to the business
a. A wire transfer receipt needs show the certified investor as the originator and the certified business as the beneficiary
b. check copy needs show the certified investor as the maker
3. A copy of the business’ bank deposit receipt (not a deposit slip) or bank statement showing the deposit(s) being made
a. A deposit receipt needs to show the certified business as the depositor
b. If an escrow account is used, submit documentation showing both the deposit into escrow and the transfer from escrow into the business’ account (note: the latter is considered the date of investment)
We will send the investor and business a Proof of Investment approval email after processing the submission.
Businesses receiving investments need to file a Business Annual Report by February 1st along with a $100 filing fee.
We will send you an annual report approval email after processing the report.
Businesses that cease operations or become insolvent need to file a Business Insolvency Report. Thereafter, the business is exempt from further annual reporting requirements.
Call Jeff Nelson, program coordinator, at 651-259-7523 or Angel.Credit@state.mn.us
Download the "Minnesota’s Angel Tax – Small Corporate Offering Registration" guidebook, or order a free copy.
Download the Angel Tax Credit fact sheet.
Watch a video about the Angel Tax Credit program.
Read the statute establishing and governing the program.