The Arizona Commerce Authority (ACA) offers a Small Business Capital Investment Incentive Program for angel investors investing in “qualified small businesses” with a tax credit up to $250,000. The guidelines for the tax credit are below.
Investor Guidelines
- Must be an individual, LLC, S Corp, or a partnership
- Submit application to ACA 30 calendar days after investment.
- One or more investments in a qualified small business up to $250,000 annually.
- Before the investment, the investor or affiliates do not own 30% plus of the total voting power of all equity securities.
Investment Guidelines
- Investment is on or after July 1, 2006.
- Investment is in an equity security.
- The investment is at least $25,000 in the form of cash or cash equivalent.
Business Guidelines
- The business can be a C Corporation, LLC, partnership, or any business entity not classified as a sole proprietorship
- Maintains a portion of operations in Arizona.
- At least two full-time non-administrative employees that are Arizona residents.
- The business is in the startup stages and is not engaged in activities not allowed by the ACE or by statute A.R.S section 41-1518(k)(6).
- Does not involve activities involving human cloning or embryonic stem cell research.
- Assets, not including intellectual property or the qualified investment, do not exceed $10 million, unless the investment was before December 31, 2011 where assets are limited to $2 million.
- Cumulatively has not received over $2 million in qualified investments.
How do I apply for the Arizona Small Business Capital Investment Incentive Program?
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.
