AB 601

Under current law, the angel investment tax credit program allows a taxpayer

to claim a tax credit that equals 25 percent of a bona fide angel investment made

directly in a qualified new business venture (QNBV) for the tax year. Current law

provides that a QNBV is a business that is certified by the Wisconsin Economic

Development Corporation (WEDC). Under current law, WEDC may certify a

business as a QNBV if the business meets certain conditions, including being

headquartered in this state, employing at least 51 percent of its employees in this

state, and having less than 100 employees. Under this bill, in addition to the existing

certification conditions, to be certified as a QNBV a business must agree to stay in

this state for at least three years following the receipt of a bona fide angel investment

and must agree to pay a penalty to WEDC if the business relocates outside of this

state within three years of receiving a bona fide angel investment. Additionally, the

bill provides that certain conditions that a business must satisfy to be certified as a

QNBV, such as having less than 100 employees and not having operated in Wisconsin

for more than ten consecutive years, apply only to initial certifications.

Under current law, a person who claims a tax credit for an early stage seed or

angel investment must hold the investment for at least three years. If the person

does not hold the investment for at least three years, the person must pay to the

Department of Revenue (DOR) the amount of the credit that the person received

related to the investment. Under this bill, a person that holds such an investment

for less than three years does not have to repay the tax credit to DOR, if the person's

investment becomes worthless, as determined by WEDC, or if a bona fide liquidity

event occurs, as determined by WEDC.

Under current law, the maximum amount of angel investment credits that may

be claimed by all claimants for all taxable years combined is $47,500,000. The bill

eliminates this limitation.