Section 620.6030

Title XL ADDITIONAL EXECUTIVE DEPARTMENTS

Chapter 620

Effective - 28 Aug 2026, see footnote   

  620.6030.  Angel investment incentive — definitions — tax credit, amount, procedure. — 1.  This section and section 620.6033 establish an angel investment incentive.

  2.  As used in this section and section 620.6033, the following terms mean:

  (1)  "Cash investment", any moneys or money-equivalent contribution in consideration of qualified securities;

  (2)  "Designated geographic regions", the following five regions:

  (a)  Region 1:  Counties of Andrew, Bates, Benton, Buchanan, Cass, Clay, Clinton, DeKalb, Gentry, Henry, Holt, Jackson, Johnson, Lafayette, Platte, Ray, and Worth, excluding areas within innovation zones located in such counties;

  (b)  Region 2:  Counties of Franklin, Jefferson, Lincoln, St. Charles, Warren, and St. Louis, and the City of St. Louis, excluding areas within innovation zones located in such counties and cities;

  (c)  Region 3:  Counties geographically north of the Missouri River, excluding any counties in region 1 or region 2, and excluding areas within innovation zones located in such counties;

  (d)  Region 4:  Counties geographically south of the Missouri River, excluding any counties in region 1 or region 2, and excluding areas within innovation zones located in such counties;

  (e)  Innovation zones: areas that have been approved as a certified Missouri innovation zone;

  (3)  "Investor", one of the following persons or entities:

  (a)  A natural person who is an accredited investor as defined under 17 CFR 230.501(a)(5) or 230.501(a)(6), as in effect on July 24, 2013;

  (b)  A permitted entity investor who is an accredited investor as defined under 17 CFR 230.501(a)(8) as in effect on July 24, 2013; or

  (c)  A natural person or permitted entity investor making an investment who qualifies under the federal Jumpstart Our Business Startups (JOBS) Act, Pub. L. 112-106 as in effect on April 5, 2012.

­

The term investor shall not include any person who serves as an executive, officer, or employee of the business in which an otherwise qualified cash investment is made, and such person shall not qualify for the issuance of tax credits for such investment.  However, an investor who serves solely as a director may qualify for the issuance of tax credits;

  (4)  "MTC", the Missouri technology corporation established under section 348.251;

  (5)  "Owner", any natural person who is, directly or indirectly, a partner, stockholder, or member in a permitted entity investor;

  (6)  "Permitted entity investor", any general partnership; limited partnership; corporation that has in effect a valid election to be taxed as an S corporation under the Internal Revenue Code of 1986, as amended; revocable living trust; nonprofit corporation; or limited liability company that has elected to be taxed as a partnership under the Internal Revenue Code of 1986, as amended, and that was established and is operated for the purpose of making investments in other entities;

  (7)  "Qualified knowledge-based company", a company engaged in the research, development, implementation, and commercialization of innovative technologies, products, and services for use in the commercial marketplace;

  (8)  "Qualified Missouri business", a Missouri business that is approved as a qualified knowledge-based company by the MTC and meets at least one of the following criteria:

  (a)  Any partnership, association, limited liability company, or corporation domiciled in Missouri; or

  (b)  Any limited liability company or corporation that is domiciled outside the state of Missouri but has its business operations located primarily in Missouri or does substantially all of such business's production in Missouri;

  (9)  "Qualified securities", a cash investment through any form or combination of forms of financial assistance as provided under this subdivision.  Such forms of financial assistance include, but are not limited to:

  (a)  Any form of equity, such as:

  a.  A general or limited partnership interest;

  b.  Common stock;

  c.  Simple agreement for future equity (SAFE); or

  d.  Preferred stock, without regard to voting rights or seniority position and regardless of whether convertible into common stock; and

  (b)  Any debt instrument subordinate to the general creditors of the qualified Missouri business debtor that requires no payment from the qualified Missouri business debtor and that shall convert to some form of equity prior to, or in conjunction with, the qualified Missouri business raising any additional funds;

  (10)  "Rural county", any county in the state of Missouri with fewer than one hundred thousand inhabitants, and such term shall be deemed to include both the farm and nonfarm population thereof.  The number of inhabitants specified in this subdivision shall be increased by six percent every ten years after each decennial census beginning in 2030;

  (11)  "Tax credit", a credit against the tax otherwise due under chapter 143, excluding withholding tax imposed by sections 143.191 to 143.265.

  3.  (1)  For all tax years beginning on or after January 1, 2027, a tax credit shall be allowed for an investor's cash investment in the qualified securities of a qualified Missouri business.  The credit shall be in a total amount equal to forty percent of such investor's cash investment in any qualified Missouri business, subject to the limitations set forth in this subsection.  The credit shall be in a total amount equal to fifty percent where the investor's cash investment in the qualified securities of a qualified Missouri business are in a rural county.  The credit shall be in a total amount equal to sixty percent where the investor's cash investment in the qualified securities of a qualified Missouri business are in a certified Missouri innovation zone.  If the amount of the credit allowed by this section exceeds the investor's tax liability in any one tax year, the remaining portion of the credit may be carried forward two years or until the total amount of the credit is used, whichever occurs first.  If the investor is a permitted entity investor, the credit provided by this section shall be claimed by the permitted entity investor in proportion to such owner's equity investment in the permitted entity investor.

  (2)  A cash investment in a qualified security shall be deemed to have been made on the date of acquisition of the qualified security, as such date is determined in accordance with the provisions of the Internal Revenue Code of 1986, as amended.

  (3)  The department and the MTC shall not allow tax credits of more than seventy-five thousand dollars for a single qualified Missouri business per investor who is a natural person or a permitted entity investor and shall not allow a total of three hundred thousand dollars in tax credits for a single tax year per investor who is a natural person or a permitted entity investor.  The total amount of tax credits that may be allowed under this section shall not exceed six million dollars during either calendar year 2027 or 2028.  Beginning in calendar year 2029, the total amount of tax credits allowed under this section shall not exceed seven million dollars, so long as the total amount of tax credits allowed in the immediately preceding calendar year was issued during such calendar year.  Beginning in the calendar year following the calendar year in which the total seven million dollars in tax credits was issued, the total amount of tax credits shall be increased to eight million dollars so long as the total amount of tax credits allowed in the immediately preceding calendar year was completely issued.

  (4)  At the beginning of each calendar year, the MTC shall equally designate the total amount of tax credits available during the first six months of that calendar year to each designated geographic region.  As soon as practicable at the end of the first six months of that calendar year, the MTC shall prepare and issue a report to the director of the department designating all tax credit awards for that year to date, so that the department may issue such tax credits in accordance with the provisions of this section and section 620.3033.

  (5)  During the last six months of the calendar year, any unissued tax credits previously allocated to any designated geographic region may be awarded at the discretion of the MTC to a qualified Missouri business in any designated geographic region throughout the state.

  (6)  Notwithstanding any provisions of sections 620.6000 to 620.6033 or any other law to the contrary, the tax credits under this subsection for qualified investments made in qualified Missouri businesses located outside of the innovation districts shall expire on December 31, 2032.

  4.  (1)  Before an investor is entitled to receive tax credits under this section and section 620.6033, such investor shall have made a cash investment in a qualified security of a qualified Missouri business.  The business shall have been approved as a qualified Missouri business before the date on which the cash investment was made.  To be designated as a qualified Missouri business, a business shall apply to the MTC.

  (2)  The application by a business shall be in the form and substance required by the MTC in coordination with the department by and through its service on the MTC board of directors but shall include at least the following:

  (a)  The name of the business and certified copies of the organizational documents of the business;

  (b)  A business plan, including a description of the business and the management, product, market, and financial plan of the business;

  (c)  A statement of the potential economic impact of the business, including the number, location, and types of jobs expected to be created;

  (d)  A description of the qualified securities to be issued, the consideration to be paid for the qualified securities, and the amount of any tax credits requested;

  (e)  A statement of the amount, timing, and projected use of the proceeds to be raised from the proposed sale of qualified securities; and

  (f)  Such other information as may be reasonably requested.

  (3)  The designation of a business as a qualified Missouri business shall be made by the MTC, and each qualified Missouri business shall annually apply to renew such designation, to be approved by the MTC.  A business shall be so designated if the MTC determines, based upon the application submitted by the business and any additional information provided in connection with such application or as reasonably requested by the MTC, that such business meets established criteria, including at least the following:

  (a)  The business shall not have had annual gross revenues of more than five million dollars in the most recent tax year of the business;

  (b)  Businesses that are not bioscience businesses shall have been in operation for less than five years, and bioscience businesses shall have been in operation for less than ten years;

  (c)  The ability of investors in the business to receive tax credits for cash investments in qualified securities of the business is beneficial to advancing the goals of this section and section 620.6033;

  (d)  The business shall not have ownership interests including, but not limited to, common or preferred shares of stock that can be traded via a public stock exchange before the date that a qualifying investment is made;

  (e)  The business shall not be engaged primarily in any one or more of the following enterprises:

  a.  The business of banking, savings and loan or lending institutions, credit or finance, or financial brokerage or investments;

  b.  The provision of professional services, such as legal, accounting, or engineering services; however, contract research or manufacturing organizations, sometimes referred to as CROs or CMOs, shall not be subject to this exclusion;

  c.  Governmental, charitable, religious, or trade organizations;

  d.  The ownership, development, brokerage, sales, or leasing of real estate;

  e.  Insurance;

  f.  Construction, construction management, or contracting;

  g.  Business consulting or brokerage;

  h.  Any business engaged primarily as a passive business, having irregular or noncontiguous operations, or deriving substantially all of the income of the business from passive investments that generate interest, dividends, royalties, or capital gains or any business arrangements the effect of which is to immunize an investor from risk of loss;

  i.  Any activity that is in violation of the law;

  j.  Any business raising moneys primarily to purchase real estate, land, or fixtures; and

  k.  Any gambling-related business;

  (f)  The business has a reasonable chance of success;

  (g)  The business has the reasonable potential to create measurable employment within the certified Missouri innovation zone, this state, or both;

  (h)  The business is based on an innovative technology, product, or service designed to be used in the commercial marketplace;

  (i)  The existing owners of the business and other founders have made or are committed to making a substantial financial or time commitment to the business;

  (j)  The securities to be issued and purchased are qualified securities;

  (k)  The business has the reasonable potential to address needs and opportunities specific to the Missouri innovation zone, this state, or both;

  (l)  The business has made binding commitments to the MTC for adequate reporting of financial data, including a requirement for an annual report or, if required, an annual audit of the financial and operational records of the business; the right of access to the financial records of the business; the right of the department and the MTC to record and publish normal and customary data and information related to the issuance of tax credits that are not otherwise determined to be trade or business secrets; and other such protections as may be in the best interest of Missouri taxpayers to achieve the goals of this section and section 620.6033; and

  (m)  The business shall satisfy all other requirements of this section and section 620.6033.

  (4)  A qualified Missouri business shall have the burden of proof to demonstrate the qualifications of the business under this section.

  (5)  The MTC shall establish an application fee for qualified Missouri businesses and investors or transferees.  This fee shall be utilized by MTC to administer this section, issue the tax credits, and review the applications.

­­--------

(L. 2026 H.B. 3231 & 2531)