S 7592: Provides for an angel investor income tax credit for investments in qualified businesses that exceed $25,000.

  
  STATE OF NEW YORK ________________________________________________________________________ 7592 2025-2026 Regular Sessions  IN SENATE April 23, 2025 ___________ Introduced by Sen. CLEARE -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue 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: 1 Section 1. Section 606 of the tax law is amended by adding a new 2 subsection (sss) to read as follows: 3 (sss) Angel investor credit. (1) Allowance of credit. A taxpayer, who 4 is an angel investor, as defined by subparagraph (ii) of paragraph three 5 of this subsection, shall be allowed a credit, to be computed as herein- 6 after provided, against the tax imposed by this article, for investing 7 twenty-five thousand dollars or more in a qualifying business. The 8 amount of the credit shall be twenty-five percent of the investment in 9 the qualifying business up to but not exceeding two hundred fifty thou- 10 sand dollars. 11 (2) Application of credit. If the amount of credit allowable under 12 this subsection for any taxable year shall exceed the taxpayer's tax for 13 such year, the excess may be carried over to the following year or 14 years, and may be deducted from the taxpayer's tax for such year or 15 years. 16 (3) Definitions. For purposes of the credit described in this 17 subsection: 18 (i) "Qualifying business" shall mean a business enterprise, including 19 a sole proprietorship, partnership or corporation that: 20 (A) has not yet generated revenue or has gross revenues, along with 21 the gross revenues of its affiliates and related members, not exceeding 22 one million dollars for the taxable year immediately preceding the year 23 the taxpayer is allowed a credit under this subsection. For purposes of 24 this paragraph, the term "related member" shall have the same meaning as 25 set forth in clauses (A) and (B) of subparagraph one of paragraph (o) of EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11749-01-5 
 S. 7592 2 1 subdivision nine of section two hundred eight of this chapter, and the 2 term "affiliates" shall mean those corporations that are members of the 3 same affiliated group (as defined in section fifteen hundred four of the 4 internal revenue code) as the taxpayer; 5 (B) has no more than twenty-five full-time employees, of which at 6 least sixty percent are employed in New York state; 7 (C) has operated in the state for no more than seven consecutive 8 years; and 9 (D) has received no more than two million dollars in investments 10 eligible for the credit described in this subsection from one or more 11 than one angel investor; 12 (ii) "Angel investor" shall mean an accredited investor as defined in 13 rule 501 of regulation D of the Federal Securities Act of 1933, as 14 amended; but shall not include: 15 (A) an investor who controls fifty percent or more of the qualifying 16 business receiving the investment subject to the credit described by 17 this subsection; or 18 (B) a venture capital company or any bank, savings and loan associ- 19 ation, trust, insurance company or similar entity, whose normal business 20 activities include venture capital investment. 21 § 2. Section 210-B of the tax law is amended by adding a new subdivi- 22 sion 61 to read as follows: 23 61. Angel investor credit. (a) Allowance of credit. A taxpayer, who is 24 an angel investor, as defined by subparagraph (ii) of paragraph (c) of 25 this subdivision, shall be allowed a credit, to be computed as herein- 26 after provided, against the tax imposed by this article, for investing 27 twenty-five thousand dollars or more in a qualifying business. The 28 amount of the credit shall be twenty-five percent of the investment in 29 the qualifying business up to but not exceeding two hundred fifty thou- 30 sand dollars. 31 (b) Application of credit. The credit allowed under this subdivision 32 for any taxable year shall not reduce the tax due for such year to less 33 than the amount prescribed in paragraph (d) of subdivision one of 34 section two hundred ten of this article. However, if the amount of 35 credit allowed under this subdivision for any taxable year reduces the 36 tax to such amount, any amount of credit thus not deductible in such 37 taxable year may be carried over to the following year or years and may 38 be deducted from the taxpayer's tax for such year or years. 39 (c) Definitions. For purposes of the credit described in this subdivi- 40 sion: 41 (i) "Qualifying business" shall mean a business enterprise, including 42 a sole proprietorship, partnership or corporation that: 43 (A) has not yet generated revenue or has gross revenues, along with 44 the gross revenues of its affiliates and related members, not exceeding 45 one million dollars for the taxable year immediately preceding the year 46 the taxpayer is allowed a credit under this subdivision. For purposes of 47 this paragraph, the term "related member" shall have the same meaning as 48 set forth in clauses (A) and (B) of subparagraph one of paragraph (o) of 49 subdivision nine of section two hundred eight of this article, and the 50 term "affiliates" shall mean those corporations that are members of the 51 same affiliated group (as defined in section fifteen hundred four of the 52 internal revenue code) as the taxpayer; 53 (B) has no more than twenty-five full-time employees, of which at 54 least sixty percent are employed in New York state; 55 (C) has operated in the state for no more than seven consecutive 56 years; and 
 S. 7592 3 1 (D) has received no more than two million dollars in investments 2 eligible for the credit described in this subdivision from one or more 3 than one angel investor; 4 (ii) "Angel investor" shall mean an accredited investor as defined in 5 rule 501 of regulation D of the Federal Securities Act of 1933, as 6 amended; but shall not include: 7 (A) an investor who controls fifty percent or more of the qualifying 8 business receiving the investment subject to the credit described by 9 this subdivision; or 10 (B) a venture capital company or any bank, savings and loan associ- 11 ation, trust, insurance company or similar entity, whose normal business 12 activities include venture capital investment. 13 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 14 of the tax law is amended by adding a new clause (lii) to read as 15 follows: 16 (lii) Angel investor credit Amount of credit under 17 under subsection (sss) subdivision sixty-one of 18 section two hundred ten-B 19 § 4. This act shall take effect immediately and shall apply to 20 personal income taxable years beginning on and after January 1, 2026.