Lawmakers Consider Amending Angel Tax Credit Law

Current efforts to allow unaccredited investors to put money in Minnesota companies are awaiting approval in the Department of Commerce.

Lawmakers are looking for ways to improve Minnesotans ability to invest in startups throughout the state as recent “equity crowdfunding” legislation is mired in rulemaking. reports that state Sen. Terri Bonoff introduced an amendment to Minnesota’s Angel Investment Tax Credit to make it more inclusive. Currently, only accredited investors—generally high-income people with significant assets—are allowed to claim the credit.
The amendment comes as legislation known as MNvest is going through rulemaking at the Department of Commerce. The law, referred to as a “Kickstarter for equity investment,” would allow private portals where unaccredited Minnesotans would be able to invest in local companies.
The bill was passed in June of 2015 and went through a 90-day comment period starting in October. Department staff then went back to the drawing board to make changes, but hasn’t been able to provide a timeline of when their work will be complete. (Rulemaking can take two years as it moves through comment periods and changes).
The lack of a set date for when Minnesotans can begin investing is “frustrating,” said Ryan Schildkraut, an attorney at Winthrop & Weinstine and a figure behind MNvest.
“We’re fielding calls every day from people who want to take advantage of MNvest, but they can’t,” he said. “And you can’t expect entrepreneurs who need money now to sit on their hands for an indeterminate time.”