S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4090
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 1, 2021
                                ___________
 
 Introduced  by  M. of A. RODRIGUEZ, BICHOTTE HERMELYN -- Multi-Sponsored
   by -- M. of A.  THIELE -- read once and referred to the  Committee  on
   Ways and Means
 
 AN  ACT  to  amend  the  tax  law, in relation to providing for an angel
   investor tax credit
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  606  of  the  tax law is amended by adding a new
 subsection (kkk) to read as follows:
   (KKK) ANGEL INVESTOR CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER,  WHO
 IS AN ANGEL INVESTOR, AS DEFINED BY SUBPARAGRAPH (II) OF PARAGRAPH THREE
 OF THIS SUBSECTION, SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREIN-
 AFTER  PROVIDED,  AGAINST THE TAX IMPOSED BY THIS ARTICLE, FOR INVESTING
 TWENTY-FIVE THOUSAND DOLLARS OR MORE IN  A  QUALIFYING  BUSINESS.    THE
 AMOUNT  OF  THE CREDIT SHALL BE TWENTY-FIVE PERCENT OF THE INVESTMENT IN
 THE QUALIFYING BUSINESS UP TO BUT NOT EXCEEDING TWO HUNDRED FIFTY  THOU-
 SAND DOLLARS.
   (2)  APPLICATION  OF  CREDIT.  IF THE AMOUNT OF CREDIT ALLOWABLE UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
 SUCH YEAR, THE EXCESS MAY BE CARRIED  OVER  TO  THE  FOLLOWING  YEAR  OR
 YEARS,  AND  MAY  BE  DEDUCTED  FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR
 YEARS.
   (3)  DEFINITIONS.  FOR  PURPOSES  OF  THE  CREDIT  DESCRIBED  IN  THIS
 SUBSECTION:
   (I)  "QUALIFYING BUSINESS" SHALL MEAN A BUSINESS ENTERPRISE, INCLUDING
 A SOLE PROPRIETORSHIP, PARTNERSHIP OR CORPORATION THAT:
   (A) HAS NOT YET GENERATED REVENUE OR HAS GROSS  REVENUES,  ALONG  WITH
 THE  GROSS REVENUES OF ITS AFFILIATES AND RELATED MEMBERS, NOT EXCEEDING
 ONE MILLION DOLLARS FOR THE TAXABLE YEAR IMMEDIATELY PRECEDING THE  YEAR
 THE  TAXPAYER IS ALLOWED A CREDIT UNDER THIS SUBSECTION. FOR PURPOSES OF
 THIS PARAGRAPH, THE TERM "RELATED MEMBER" SHALL HAVE THE SAME MEANING AS
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03162-01-1

 A. 4090                             2
 
 SET FORTH IN CLAUSES (A) AND (B) OF SUBPARAGRAPH ONE OF PARAGRAPH (O) OF
 SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS CHAPTER,  AND  THE
 TERM  "AFFILIATES" SHALL MEAN THOSE CORPORATIONS THAT ARE MEMBERS OF THE
 SAME AFFILIATED GROUP (AS DEFINED IN SECTION FIFTEEN HUNDRED FOUR OF THE
 INTERNAL REVENUE CODE) AS THE TAXPAYER;
   (B)  HAS  NO  MORE  THAN  TWENTY-FIVE FULL-TIME EMPLOYEES, OF WHICH AT
 LEAST SIXTY PERCENT ARE EMPLOYED IN NEW YORK STATE;
   (C) HAS OPERATED IN THE STATE  FOR  NO  MORE  THAN  SEVEN  CONSECUTIVE
 YEARS; AND
   (D)  HAS  RECEIVED  NO  MORE  THAN  TWO MILLION DOLLARS IN INVESTMENTS
 ELIGIBLE FOR THE CREDIT DESCRIBED IN THIS SUBSECTION FROM  ONE  OR  MORE
 THAN ONE ANGEL INVESTOR;
   (II)  "ANGEL INVESTOR" SHALL MEAN AN ACCREDITED INVESTOR AS DEFINED IN
 RULE 501 OF REGULATION D OF THE  FEDERAL  SECURITIES  ACT  OF  1933,  AS
 AMENDED; BUT SHALL NOT INCLUDE:
   (A)  AN  INVESTOR WHO CONTROLS FIFTY PERCENT OR MORE OF THE QUALIFYING
 BUSINESS RECEIVING THE INVESTMENT SUBJECT TO  THE  CREDIT  DESCRIBED  BY
 THIS SUBSECTION; OR
   (B)  A  VENTURE  CAPITAL COMPANY OR ANY BANK, SAVINGS AND LOAN ASSOCI-
 ATION, TRUST, INSURANCE COMPANY OR SIMILAR ENTITY, WHOSE NORMAL BUSINESS
 ACTIVITIES INCLUDE VENTURE CAPITAL INVESTMENT.
   § 2. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 55 to read as follows:
   55. ANGEL INVESTOR CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER, WHO IS
 AN  ANGEL  INVESTOR, AS DEFINED BY SUBPARAGRAPH (II) OF PARAGRAPH (C) OF
 THIS SUBDIVISION, SHALL BE ALLOWED A CREDIT, TO BE COMPUTED  AS  HEREIN-
 AFTER  PROVIDED,  AGAINST THE TAX IMPOSED BY THIS ARTICLE, FOR INVESTING
 TWENTY-FIVE THOUSAND DOLLARS OR MORE IN  A  QUALIFYING  BUSINESS.    THE
 AMOUNT  OF  THE CREDIT SHALL BE TWENTY-FIVE PERCENT OF THE INVESTMENT IN
 THE QUALIFYING BUSINESS UP TO BUT NOT EXCEEDING TWO HUNDRED FIFTY  THOU-
 SAND DOLLARS.
   (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
 FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
 THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
 SECTION TWO HUNDRED TEN OF THIS ARTICLE.   HOWEVER,  IF  THE  AMOUNT  OF
 CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCTIBLE  IN  SUCH
 TAXABLE  YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY
 BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   (C) DEFINITIONS. FOR PURPOSES OF THE CREDIT DESCRIBED IN THIS SUBDIVI-
 SION:
   (I) "QUALIFYING BUSINESS" SHALL MEAN A BUSINESS ENTERPRISE,  INCLUDING
 A SOLE PROPRIETORSHIP, PARTNERSHIP OR CORPORATION THAT:
   (A)  HAS  NOT  YET GENERATED REVENUE OR HAS GROSS REVENUES, ALONG WITH
 THE GROSS REVENUES OF ITS AFFILIATES AND RELATED MEMBERS, NOT  EXCEEDING
 ONE  MILLION DOLLARS FOR THE TAXABLE YEAR IMMEDIATELY PRECEDING THE YEAR
 THE TAXPAYER IS ALLOWED A CREDIT UNDER THIS SUBDIVISION. FOR PURPOSES OF
 THIS PARAGRAPH, THE TERM "RELATED MEMBER" SHALL HAVE THE SAME MEANING AS
 SET FORTH IN CLAUSES (A) AND (B) OF SUBPARAGRAPH ONE OF PARAGRAPH (O) OF
 SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE,  AND  THE
 TERM  "AFFILIATES" SHALL MEAN THOSE CORPORATIONS THAT ARE MEMBERS OF THE
 SAME AFFILIATED GROUP (AS DEFINED IN SECTION FIFTEEN HUNDRED FOUR OF THE
 INTERNAL REVENUE CODE) AS THE TAXPAYER;
   (B) HAS NO MORE THAN TWENTY-FIVE  FULL-TIME  EMPLOYEES,  OF  WHICH  AT
 LEAST SIXTY PERCENT ARE EMPLOYED IN NEW YORK STATE;

 A. 4090                             3
 
   (C)  HAS  OPERATED  IN  THE  STATE  FOR NO MORE THAN SEVEN CONSECUTIVE
 YEARS; AND
   (D)  HAS  RECEIVED  NO  MORE  THAN  TWO MILLION DOLLARS IN INVESTMENTS
 ELIGIBLE FOR THE CREDIT DESCRIBED IN THIS SUBDIVISION FROM ONE  OR  MORE
 THAN ONE ANGEL INVESTOR;
   (II)  "ANGEL INVESTOR" SHALL MEAN AN ACCREDITED INVESTOR AS DEFINED IN
 RULE 501 OF REGULATION D OF THE  FEDERAL  SECURITIES  ACT  OF  1933,  AS
 AMENDED; BUT SHALL NOT INCLUDE:
   (A)  AN  INVESTOR WHO CONTROLS FIFTY PERCENT OR MORE OF THE QUALIFYING
 BUSINESS RECEIVING THE INVESTMENT SUBJECT TO  THE  CREDIT  DESCRIBED  BY
 THIS SUBDIVISION; OR
   (B)  A  VENTURE  CAPITAL COMPANY OR ANY BANK, SAVINGS AND LOAN ASSOCI-
 ATION, TRUST, INSURANCE COMPANY OR SIMILAR ENTITY, WHOSE NORMAL BUSINESS
 ACTIVITIES INCLUDE VENTURE CAPITAL INVESTMENT.
   § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of  the  tax  law  is  amended  by adding a new clause (xlvi) to read as
 follows:
 
 (XLVI) ANGEL INVESTOR CREDIT            AMOUNT OF CREDIT UNDER
 UNDER SUBSECTION (KKK)                  SUBDIVISION FIFTY-FIVE OF
                                         SECTION TWO HUNDRED TEN-B
 
   § 4. This act  shall  take  effect  immediately  and  shall  apply  to
 personal income taxable years beginning on and after January 1, 2022.