The Angel Investor Tax Credit incentive program administered by the Louisiana Economic Development department has specific rules applicants and investors must follow:
Louisiana Entrepreneurial Business
- The business must possess a fully developed business plan that includes all appropriate long- and short-term forecasts and contingencies of business operations, including research and development, profit, loss and cash flow projections and details of expenditures for angel investor funding.
- The principal business operations are in Louisiana, including Louisiana as the primary place of employment for the workers in the business.
- The business has either gross annual sales of less than $10 million or a business net worth of less than $2 million.
- The business employs 50 or fewer full-time employees.
- The business must show the number of quality jobs it will create, as defined by the state.
- The business is not primarily engaged in the business of retail sales, real estate, professional services, gaming or gambling, natural resource extraction or exploration, or financial services, including venture capital funds.
- The business has a plan of progression through which more than 50 percent of its sales will be derived from outside of Louisiana.
- The business is required to report the investment amount requested and provide a “Source and Use” statement showing that the investment funds will be used for capital improvements, plant and equipment, research and development, working capital for the business or other business activity approved by LED.
- The business has a Louisiana Tax Identification Number. Under no circumstances shall the LED secretary’s certification of the applicant as a Louisiana Entrepreneurial Business be considered or implied to be an endorsement of the business or any investment in that business, and the applicant has to advise investors of this fact.
- The angel investor or investors cannot be the principal owner or owners of the business who are involved in operating the business as a full-time professional activity nor can their spouses and relatives within the third degree of sanguinity or affinity. A principal owner means one or more persons who own an aggregate of 50 percent or more of the Louisiana Entrepreneurial Business.
For more information, go to http://www.louisianaeconomicdevelopment.com/incentives--programs/angel-investor-tax-credit.aspx.