The Angel Investor Tax Credit

The Angel Investor Tax Credit 

A Unique Way to Invest Capital in a Louisiana Business

Among other Louisiana state tax credits – such as the Louisiana film and entertainment tax credit – the Louisiana angel investor tax credit offers a unique opportunity for investors to make investments in certain Louisiana start-up businesses.  The program provides a 35% tax credit on investments made by an accredited investor who makes an investment in a business certified by Louisiana Economic Development (“LED”), a state agency.  These businesses must be certified as Louisiana entrepreneurial businesses by LED.  It is important to note that the total annual tax credits allotted by the State are capped at $5,000,000.00 and the accredited investor may only invest up to $1,000,000.00 per year and $2,000,000.00 in total in a qualified business.  Under the current law, the program is set to expire in June of 2015.

The angel investor tax credits are not available for all investments in Louisiana businesses.  In general, the credits are not available for businesses involved in retail sales, real estate, professional services, gaming, natural gas exploration and other financial services.  Furthermore, only certain uses of the funds invested qualify for credits, namely; capital improvements, research and development, and general working capital.  Investments may not be used to pay dividends and/or repay shareholder loans and debt.

It is important to note that an accredited investor is generally defined as any natural person who has a net worth of over $1,000,000.00 and an individual income of $200,000.00 or joint income of $300,000.00, if married.  A pool of Angel Investors, all of whom are accredited – may also be eligible to make an investment.

An application to LED should be submitted through its website and include proof of investment.  In exchange, LED will issue a tax certification letter stating that the investment qualifies for tax credits and the years of eligibility for which the credits may be applied against Louisiana income and corporate franchise tax liabilities of the investor.  The tax credits may also be sold to a third party.  Applications are received on a first-come, first-served basis, and the tax credits are issued in the order in which they are received until the annual allotment has been exhausted.

If you or a client has an interest in learning more about the Angel Investment Tax Credit Program, please contact Christian Weiler at cweiler@wrtaxlaw.com or (504)524-2944.

**This information is provided by Weiler & Rees, LLC for educational and informational purposes only and is not intended, nor should it be construed as legal advice.

Compliance with the Patient Protection and Affordable Care Act (PPACA)

In the wake of the US Supreme Court ruling upholding the Patient Protection and Affordable Care Act (the “Affordable Care Act”) – employers and individual taxpayers alike must now face the reality of compliance with this new legislation. In particular, business clients must soon determine which employees will be covered under the Affordable Care Act or face penalties by the IRS.

The tax attorneys at Weiler & Rees hold the knowledge and expertise to accurately advise clients on the tax and business ramifications of this legislation. The firm stands ready to advise employers, both large and small, on the legal requirements to provide affordable health insurance, penalties for failing to comply, eligibility for tax credits, and additional informational reporting requirements to the IRS.

Weiler & Rees is also prepared to advise individual clients on the penalty for failing to satisfy the individual mandate requirement, the additional FICA, Medicare and other taxes provided for in the Affordable Care Act and other relevant tax related provisions found in the Affordable Care Act.

For more information about this topic, please contact Christian N. Weiler.

This information is provided by Weiler & Rees for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.