The Angel Investor Tax Credit was signed into law by Governer Perdue in June of 2010. It provides for a Georgia tax credit of up to $50,000 annually for investors in startup companies in Georgia. The credit equals 35% of the amount invested and is available for investments made in 2011, 2012, and 2013. Investments must be made in the form of cash in exchange for stock by an accredited investors that manage $5 million or less in capital.
In order for a startup to qualify it must be a partnership, LLC, or corporation located in Georgia that was organized less then three years before the investment is made. The company’s headquarters must be in Georgia and remain so the entire time the investor benefits from the tax credit. The startup must also employ less than 21 people, have revenues that do not exceed $500,000, and cannot have obtained more than $1 million in debt or equity. There are some industry limitations as well but generally speaking any technology company is eligible.
But here is the kicker, in order for a business to qualify as an eligible investment under the angel tax credit, the startup must register with the tax commissioner using Form IT-QBR prior to receiving the capital investment. Mitch co-authored an article on the angel investor tax credit that provides more detail with links to the regulations and required form.
The Angel Investor Tax Credit is a great move taken by the state of Georgia to promote the development of startups. Mitch and the rest of the HA&W team are doing a great job spreading the word to the startup community so they can take advantage of the program.