Increased angel investment tax credits approved

Senators passed a bill May 21 that increases tax credits available to business investors.

Currently, investors can apply for up to $3 million in annual refundable tax credits for investments made in a business with at least 51 percent of its workforce and payroll in Nebraska and 25 or fewer employees primarily engaged in researching, developing or using products and services in the high-tech field.

LB156, introduced by Gering Sen. John Stinner, increases the annual maximum available amount of the angel investment tax credit to $4 million.

According to state statute, the high-tech field includes aerospace, agricultural processing, renewable energy, energy efficiency and conservation, environmental engineering, food technology, cellulosic ethanol, information technology, materials science technology, nanotechnology, telecommunications, biosolutions, medical device products, pharmaceuticals, diagnostics, biologicals, chemistry and veterinary science.

To qualify for tax credits, an individual must invest at least $25,000 in a calendar year and qualified funds—composed of three or more investors—are required to invest at least $50,000.

Refundable credits equaling 35 percent of the investment are granted to investors with caps of $350,000 for married couples filing joint returns and $300,000 for all other filers.

Refundable credits of 40 percent are offered for investments made in a business located in a distressed area, which is defined as a city, a county with a population of fewer than 100,000 residents, an unincorporated area within a county or a census tract that has an unemployment rate that exceeds the statewide average, a per capita income below the statewide average or a population decrease between the two most recent censuses.

The bill passed on a 46-0 vote.