1. In order for an equity investment to qualify for a tax credit, the business in which the equity investment is made shall, within one hundred twenty days of the date of the first investment, notify the board of the names, addresses, taxpayer identification numbers, shares issued, consideration paid for the shares, and the amount of any tax credits, of all shareholders who may initially qualify for the tax credits, and the earliest year in which the tax credits may be redeemed. The list of shareholders who may qualify for the tax credits shall be amended as new equity investments are sold or as any information on the list shall change.
2. In order to be a qualifying business, a business must meet all of the following criteria:
a. The principal business operations of the business are located in this state.
b. The business has been in operation for three years or less.
c. The business has an owner who has successfully completed one of the following:
(1) An entrepreneurial venture development curriculum.
(2) Three years of relevant business experience.
(3) A four-year college degree in business management, business administration, or a related field.
(4) Other training or experience as the board may specify by rule or order as sufficient to increase the probability of success of the qualifying business.
d. The business is not a business engaged primarily in retail sales, real estate, or the provision of health care or other professional services.
e. The business shall not have a net worth that exceeds three million dollars.
f. The business shall have secured, within twenty-four months following the first date on which the equity investments qualifying for tax credits have been made, total equity or near equity financing equal to at least two hundred fifty thousand dollars.
3. A qualifying business shall have the burden of proof to demonstrate to the board its qualifications under this section, and shall have the obligation to notify the board in a timely manner of any changes in the qualifications of the business or in the eligibility of investors to redeem the investment tax credits in any tax year.
4. After verifying the eligibility of a qualifying business, the board shall issue a tax credit certificate to be attached to the equity investor's tax return. The tax credit certificate shall contain the taxpayer's name, address, tax identification number, the amount of credit, the name of the qualifying business, and other information required by the department of revenue and finance. The tax credit certificate, unless rescinded by the board, shall be accepted by the department of revenue and finance as payment for taxes imposed pursuant to chapter 422, division II, subject to any conditions or restrictions placed by the board upon the face of the tax credit certificate and subject to the limitations of section 15E.43.
2002 Acts, ch 1006, §4, 13
Section takes effect February 28, 2002, and applies retroactively to tax years beginning on or after January 1, 2002; 2002 Acts, ch 1006, §13
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