Arizona Angel Capital Tax Credit Passes – Two new laws promote state’s high-tech economy

Arizona’s investment and technology communities are the anticipated winners from the state legislature’s recent passage of a tax credit encouraging angel capital investments in start-up Arizona tech firms.

Senate Bill 1335 provides individual investors, limited partnerships or "S" corporations a 10 percent state tax credit per year for three years for investments in qualified technology companies. For investments in qualified biotech firms or for technology businesses located in rural areas, the credit climbs to 12 percent per year for two years and 11 percent the third year. Investments must be a minimum of $25,000 and only the first $250,000 of any investment is eligible for the tax credit.

The Arizona Department of Commerce will administer the angel investment tax program, capped at $20 million over five years, and will qualify eligible companies and investors. Qualifying technology firms must employ at least two individuals and having no more than $2 million in assets.

Gov. Janet Napolitano’s signature on the measure is expected, according to a May 10 article in the Arizona Republic.

More information on S.B. 1335 is available at: http://www.azleg.state.az.us/legtext/47leg/1r/bills/sb1335h.htm

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Two new laws promote state’s high-tech economy

TEYA VITU
Tucson Citizen

Two bills signed in recent days by Gov. Janet Napolitano provide incentives to investors and multi-state corporations to build Arizona’s high-tech economy.

SB 1335 provides tax credits to investors committing money to early-stage high-tech companies. HB 2139 shifts the corporate income tax formula for multistate corporations entirely to sales income over the next five years.

Both laws have been sought by Tucson’s high-tech community for several years.

The small business tax credit gives a 30 percent credit to investors who invest $25,000 to $250,000 in start-up high-tech companies with at least two full-time employees but no more than $2 million in assets. The tax credit is 35 percent for biotech companies or rural high-tech companies.

"It’s a substantial reduction on risk in investing," said Bob Morrison, executive director of the Desert Angels, a loose knit group of 60 to 70 potential investors, each worth at least $1 million and each looking to invest in start-up companies.

"We get from the beginning almost a third of our original investment returned to us."

Full Story: http://www.tucsoncitizen.com/index.php?page=business&story_id=052505d1_bizinvest