La. R.S. 47:6020 — Angel Investor Tax Credit Program

A. Purpose. The legislature finds that the welfare of the state is enhanced by a
healthy entrepreneurial business environment and that ready sources of capital necessary to
support this environment are not currently available. The Angel Investor Tax Credit Program
is intended to achieve the following purposes:
(1) To encourage third parties to invest in early stage wealth-creating businesses in
the state.
(2) To expand the economy of the state by enlarging its base of wealth-creating
businesses.
(3) To enlarge the number of quality jobs available to retain the presence of young
people educated in Louisiana.
B. Administration. (1) Program. Investments made on or after January 1, 2011, by
qualifying individuals or entities that invest in a Louisiana Entrepreneurial Business as
defined by R.S. 51:2303(5) may apply for, and if qualified, be granted a tax credit. The
administration of tax credit applications, certification of eligibility and qualification of
applicants for tax credits, and the provision for these credits shall be known as the Angel
Investor Tax Credit Program, hereinafter referred to as "program".
(2) Rules. The program shall be implemented and administered by Louisiana
Economic Development, hereinafter referred to as "department". In compliance with the
Administrative Procedure Act, the department shall adopt and promulgate rules as are
necessary for the efficient and effective administration of this program in keeping with the
purposes for which it is enacted. The department shall work closely with the secretary of the
Department of Revenue in the development and promulgation of rules. The rules shall
include provisions for:
(a) An application process through which the department may certify the eligibility
of an investor applicant for receipt of the tax credit and the qualification of an investor to
claim the credit against state tax liability.
(b) The presentation of an investor's eligibility certification and any other
documentation required in order to earn or claim a credit.
(c) Repealed by Acts 2025, No. 515, §3, eff. July 4, 2025.
(3) Reporting. Each Louisiana Entrepreneurial Business that participates in the
program shall submit a report to Louisiana Economic Development containing the following
information:
(a) The total amount of angel investment the business is seeking at the time of
application and the intended use of the proceeds.
(b) The number of employees and the amount of total payroll at the time of
application.
(c) The number of employment positions and payroll expected to be added as a result
of the angel investment.
(d) The number of patents filed by and issued to the Louisiana Entrepreneurial
Business.
(e) The amount of any grant or contract awarded from the federal Small Business
Technology Transfer Program or a federal Small Business Innovation Research Grant.
(f) Identification of any partnerships or other contractual relationships with Louisiana
colleges and universities for research or innovation projects.
(g) The primary city and parish where the business is located.
(h) The annual business revenues of the Louisiana Entrepreneurial Business in the
prior calendar year.
(i) Any other relevant information as requested by the department.
C. Qualifications. (1) To qualify for a tax credit, the investor and the investment
shall meet all of the following requirements:
(a) The investment in the Louisiana Entrepreneurial Business must be an investment
that is at risk and not secured or guaranteed. "At risk" means that the repayment of the
investment is entirely dependent on the success of the Louisiana Entrepreneurial Business.
The funds invested by the applicant cannot have been raised as a result of illegal activity.
(b) For the purposes of the program, an angel investor or investors cannot be the
principal owner or owners of the business who are involved in the operation of the business
as a full-time professional activity, nor can their spouses and relatives within the third degree
of consanguinity or affinity. A principal owner means one or more persons who own an
aggregate of fifty percent or more of the Louisiana Entrepreneurial Business.
(c) The use of proceeds from the investment must be used for capital improvements,
plant equipment, research and development, working capital for the business, or other
business activity as may be approved by the department. The proceeds cannot be used to pay
dividends, repay shareholder's loans, redeem shares, or repay debt unless approved by the
department.
(d) The investor applicant shall meet the definition of accredited investor established
by Rule 501 in Regulation D of the General Rules and Regulations promulgated under the
Securities Act of 1933.
(e) The investment in the Louisiana Entrepreneurial Business by the applicant must
be maintained for three years unless otherwise approved by Louisiana Economic
Development.
(2) To qualify for an angel investor tax credit, the Louisiana Entrepreneurial
Business in which the investment is made shall meet all the following requirements:
(a) The principal business operations of the business are located in Louisiana.
(b) Prior to the award of the credit, the department has certified the business as a
Louisiana Entrepreneurial Business under the program.
(c) The business must demonstrate that it will be a high-growth, wealth-creating
business for Louisiana by demonstrating in its business plan that it will have more than fifty
percent of its sales from outside Louisiana.
(d) The business is primarily engaged in one of the following business sectors as
determined by Louisiana Economic Development: energy and process industries, logistics,
aerospace and defense, agribusiness, professional services, life sciences, and technology.
(e) The business is not a business engaged primarily in retail sales, real estate,
gaming or gambling, natural resource extraction or exploration, or financial services
including venture capital funds.
D. Tax credits. (1) The total amount of tax credits granted by the department in any
calendar year shall not exceed three million six hundred thousand dollars. No new credits
shall be reserved after June 30, 2026. The department shall, by rule, establish the method of
allocating available tax credits to investors including but not limited to a first-come,
first-served system, reservation of tax credits for a specific time period, or other method
which the department, in its discretion, may find beneficial to the program. If the department
does not grant the entire three million six hundred thousand dollars in tax credits in any
calendar year, the amount of residual unused tax credits shall carry forward to subsequent
calendar years and may be granted in any year without regard to the three million six hundred
thousand dollar per year limitation or the termination of new credits provided for in this
Paragraph. Beginning January 1, 2026, no residual unused credit amounts shall carry
forward; however, the department may grant tax credits pursuant to this Section until the
balance of residual unused credits accumulated prior to January 1, 2026, is exhausted. After
the approval of an investor pool, the department shall issue a letter identifying the amount
of tax credits that are available to that pool; however, no tax credit shall be granted to an
investor until the investment has been made in the Louisiana Entrepreneurial Business.
(2)(a) An investor may apply for and, if qualified, be granted a credit on any income
tax liability owed to the state by the taxpayer seeking to claim the credit in the amount
approved by the secretary of the department. The amount of the tax credit shall be based
upon the amount of money invested by the investor in the Louisiana Entrepreneurial
Business, which investment shall not exceed seven hundred twenty thousand dollars per year
per business and one million four hundred forty thousand dollars total per business. Except
as otherwise provided in Subparagraph (b) of this Paragraph, the credit shall be allowed
against the income tax for the taxable period in which the credit is earned. The credits
approved by the department shall be granted at the rate of twenty-five percent of the amount
of the investment.
(b) After certifying the eligibility of the Louisiana Entrepreneurial Business and the
amount of the investment, the secretary of the department shall issue a tax credit certificate,
a copy of which is to be attached to the tax return of the angel investor. The tax credit
available in the first year shall become deductible from tax liability in the taxpayer's income
tax year which occurs twenty-four months from the date the department certifies the amount
of the investment.
(c) The tax credit certificate shall contain the investor's name, address, tax
identification number, the amount of credit, the name of the qualifying Louisiana
Entrepreneurial Business, a statement certifying that the Louisiana Entrepreneurial Business
was domiciled in Louisiana at the close of the previous calendar year, and other information
which may be required by the Department of Revenue. The tax credit certificate, unless
rescinded by the department, shall be accepted by the Department of Revenue as proof of the
credit.
(d) The department shall maintain a list of the tax credit certificates issued.
NOTE: Subparagraph (D)(3)(a) eff. until Jan. 1, 2026. See Acts 2024, 3rd Ex. Sess., No. 6.
(3)(a) All entities taxed as corporations for Louisiana income or corporation franchise
tax purposes shall claim any credit allowed under this Section on their corporation income
and corporation franchise tax return.
NOTE: Subparagraph (D)(3)(a) as amended by Acts 2024, 3rd Ex. Sess., No. 6, eff. Jan. 1,
2026.
(3)(a) All entities taxed as corporations for Louisiana income tax purposes shall
claim any credit allowed under this Section on their corporation income tax return.
(b) Individuals shall claim any credit allowed under this Section on their individual
income tax return.
(c) Estates or trusts shall claim any credit allowed under this Section on their
fiduciary income tax returns.
(d) Entities not taxed as corporations shall claim any credit allowed under this
Section on the returns of the partners or members as follows:
NOTE: Item (D)(3)(d)(i) eff. until Jan. 1, 2026. See Acts 2024, 3rd Ex. Sess., No. 6.
(i) Corporate partners or members shall claim their share of the credit on their
corporation income or corporation franchise tax returns.
NOTE: Item (D)(3)(d)(i) as amended by Acts 2024, 3rd Ex. Sess., No. 6, eff. Jan. 1, 2026.
(i) Corporate partners or members shall claim their share of the credit on their
corporation income tax returns.
(ii) Individual partners or members shall claim their share of the credit on their
individual income tax returns.
(iii) Partners or members that are estates or trusts shall claim their share of the credit
on their fiduciary income tax returns.
(4) A tax credit granted pursuant to the Angel Investor Program shall expire and have
no value or effect on tax liability beginning with the eleventh tax year after the tax year in
which it was originally granted.
(5)(a) If at the close of any calendar year in the five-year period beginning with the
first year in which a tax credit certificate was issued to an investor, the Louisiana
Entrepreneurial Business is no longer domiciled in Louisiana, the tax credit shall be
recaptured from the investor unless change of domicile is the result of a merger,
consolidation, or other acquisition of such business or all or substantially all of the assets of
the business with or by a party not affiliated with the business.
(b) If at the close of any calendar year in the three-year period beginning with the
first year a tax credit certificate was issued to an investor, the investor transfers the equity
received in connection with the qualified investment, the tax credit shall be recaptured from
the investor unless the transfer results from any of the following circumstances:
(i) The liquidation of the business issuing the equity.
(ii) The merger, consolidation, or other acquisition of the business or all or
substantially all of the assets of the business with or by a party not affiliated with the
business.
(iii) The death of the investor.
(iv) The transfer of the equity in the Louisiana Entrepreneurial Business by the
investor is to an entity, trust, or other organization under the control of the investor. For
purposes of this Subparagraph, an entity shall be deemed to be in control of an investor if the
investor is the beneficiary owner of at least a majority of the outstanding equity securities of
the entity or has the right to control the voting power of the entity, trust, or other organization
to which the securities are transferred.
E.(1) Any person making an application, claim for tax credit, or any report, return,
statement, or other instrument or providing any other information pursuant to the provisions
of the Angel Investor Tax Credit Program who willfully makes a false or fraudulent
application, claim, report, return, statement, invoice, or other instrument or who willfully
provides any false or fraudulent information, any person who willfully aids or abets another
in making a false or fraudulent application, claim, report, return, statement, invoice, or other
instrument, or any person who willfully aids or abets another in providing any false or
fraudulent information, shall be guilty, upon conviction, of a felony and shall be punished
by the imposition of a fine of not less than one thousand dollars and not more than fifty
thousand dollars or imprisoned for not less than two years and not more than five years, or
both.
(2) Any person convicted of a violation of this Section shall be liable for the
repayment of all tax credit amounts which were granted to that person. Interest shall be due
on such repayments at the rate of fifteen percent per annum.
F. Transferability of the credit. Any Angel Investor Tax Credits not previously
claimed by any taxpayer against its tax may be transferred or sold to another Louisiana
taxpayer, subject to the following conditions:
(1) A single transfer or sale may involve one or more transferees. The transferee of
the tax credits may transfer or sell such tax credits subject to the conditions of this
Subsection.
(2) Transferors and transferees shall submit to the Department of Revenue, in
writing, a notification of any transfer or sale of tax credits within ten business days after the
transfer or sale of such tax credits. The notification shall include the transferor's tax credit
balance prior to transfer, a copy of any tax credit certificate issued by the secretary of
Louisiana Economic Development, the transferor's remaining tax credit balance after
transfer, all tax identification numbers for both transferor and transferee, the date of transfer,
the amount transferred, the price paid by the transferee to the transferor, and any other
information required by the department or the Department of Revenue. Any information
submitted by a transferor or transferee shall be treated by the department and the Department
of Revenue as proprietary to the entity or person reporting such information and therefore
confidential. However, this shall not prevent the publication of summary data that includes
no fewer than three transactions.
(3) Failure to comply with this Subsection will result in the disallowance of the tax
credit until the taxpayers are in full compliance.
(4) The transfer or sale of this credit does not extend the time in which the credit can
be used. The carryforward period for credit that is transferred or sold begins on the date on
which the credit was earned.
(5) To the extent that the transferor did not have rights to claim or use the credit at
the time of the transfer, the Department of Revenue shall either disallow the credit claimed
by the transferee or recapture the credit from the transferee through any collection method
authorized by this Section or R.S. 47:1561. The transferee's recourse is against the
transferor.
G.(1) Applications received on or after July 1, 2020, for investments that meet the
requirements of Subsection C of this Section and the requirements of 26 U.S.C. 1400Z-1, or
for investments in Louisiana Entrepreneurial Businesses located in parishes with a population
of less than fifty thousand according to the most recent federal decennial census, shall be
entitled to an enhanced credit in accordance with the provisions of this Subsection.
(2) The amount of the credit granted by the department shall be thirty-five percent
of the amount of the investment.
(3)(a) In addition to the credit cap provided for in Subsection D of this Section, the
total amount of credits granted pursuant to this Subsection shall not exceed three million six
hundred thousand dollars per year for a total program cap of seven million two hundred
thousand dollars per year. No new credits shall be reserved after June 30, 2026.
(b) If the department does not grant the entire three million six hundred thousand
dollars in tax credits in any calendar year authorized pursuant to this Subsection, the amount
of unused tax credits shall carry forward to subsequent calendar years and may be granted
in any year without regard to the three million six hundred thousand dollar annual cap or the
termination of new credits provided for in this Subsection.
H. No credits shall be granted or reserved through the program established in this
Section for reservation applications received by the department after the date when the total
unused credit amount available pursuant to Paragraph (D)(1) or (G)(3) of this Section is
exhausted.
Acts 2005, No. 400, §1; Acts 2011, No. 414, §1, eff. July 8, 2011; Acts 2013, No.
418, §1, eff. June 21, 2013; Acts 2015, No. 104, § , eff. June 19, 2015; Acts 2015, No. 125,
§2, eff. July 1, 2015; Acts 2016, 1
st
Ex. Sess., No. 29, §2; Acts 2017, No. 323, §§1, 3, eff.
June 22, 2017; Acts 2017, No. 345, §1, eff. July 1, 2017 and §§2, 3, eff. July 1, 2018; Acts
2017, No. 400, §§1, 2, and 4, eff. June 26, 2017; Acts 2020 1
st
Ex. Sess., No. 19, §1; Acts
2020 1
st
Ex. Sess., No. 22, §1, eff. July 13, 2020; Acts 2023, No. 253, §1, eff. June 12, 2023;
Acts 2024, 3rd Ex. Sess., No. 5, §1, eff. Jan. 1, 2025; Acts 2024, 3rd Ex. Sess., No. 6, §1,
eff. Jan. 1, 2026; Acts 2024, 3rd Ex. Sess., No. 11, §2, eff. Dec. 4, 2024; Acts 2025, No. 515,
§§1, 3, eff. July 4, 2025; §2, eff. Jan. 1, 2026.
NOTE: See Acts 2023, No. 253, §2, re: applicability.
NOTE: See Acts 2024, 3
rd
Ex. Sess., No. 5, §4, regarding applicability to franchise
tax periods beginning on or after Jan. 1, 2026.