Statement of Purpose, Outline of Topics, Applicable Tax Years

(a) Statement of Purpose. 830 CMR 62.6.5 explains the calculation of the Angel Investor Tax Credit allowed to taxpayer investors for qualifying investments in qualifying businesses, established by St. 2016, c. 219, § 139; amended by St. 2018, c. 228, §§ 13 and 14; and codified at M.G.L. c. 62, § 6(t).

830 CMR 62.6.5 is necessary to explain how to calculate and claim the angel investor tax credit allowed to M.G.L. c. 62 taxpayers for investments in certain qualifying small businesses. An investment must be made by an accredited investor , as defined by the United States Securities and Exchange Commission, to qualify for the credit and investments must be used to support a qualifying business for purposes such as capital improvements, plant equipment, research and development and working capital. Under M.G.L. c. 62, § 6(t), a taxpayer investor may be allowed a credit against the Massachusetts personal income tax up to an amount equal to 20% of the qualifying investments in a qualifying business. A taxpayer investor may be allowed a credit up to an amount equal to 30% of the amount of qualifying investments in a qualifying business located in a “Gateway Municipality,” as defined in M.G.L. c. 23A, § 3A.

Administration of the credit has been delegated to the Massachusetts Life Sciences Center (MLSC), in consultation with the Executive Office of Housing and Economic Development (EOHED) and the Department of Revenue (DOR). Accordingly, 830 CMR 62.6.5 is being promulgated in collaboration with these agencies. M.G.L. c. 62, § 6(t)(6). Angel investor tax credits awarded by MLSC are subject to the annual cap applicable to other life sciences credits. No credit may be claimed prior to an award by MLSC.