Individuals
An individual who purchases the equity securities or subordinated debt of a qualified business is allowed a credit against the tax for the taxable year equal to 25% of the amount invested or $50,000, whichever is less. The credit is not allowable for the year in which the investment was made, but is allowable for the taxable year beginning during the calendar year following the calendar year in which the investment was made.

Pass-Through Entities
A pass-through entity that purchases the equity securities or subordinated debt of a qualified business is allowed a tax credit for the taxable year equal to 25% of the amount invested or $750,000, whichever is less. This credit is not allowed to a pass-through entity that has committed capital under management in excess of $5,000,000. Each individual who is an owner of a pass-through entity is allowed a credit equal to his allocated share of the credits (not to exceed $50,000) For which the pass-through entity is eligible. If the owner's share of the pass-through entity's credit is limited due to the maximum allowable credit for a taxable year, the pass-through entity and its owners may not reallocate the unused credit among the other owners.

Limit
The credit may not exceed the amount of tax liability for the taxable year reduced by the sum of all other credits allowable, except tax payments. Any unused credit may be carried forward for the next five succeeding years. Annual limitations on the amount of credit do not apply to unused amounts carried forward.

Ceiling
The total amount of all tax credits allowed for qualified business investments in a calendar year may not exceed $7,000,000. The Secretary of Revenue will calculate the total credits from the applications filed. If the total for the calendar year exceeds $7,000,000, a portion of the credits claimed will be allowed by allocating the $7,000,000 in proportion to the size of the credit claimed by each taxpayer. The Secretary of Revenue will notify each taxpayer on or before December 31 of the year following the calendar year in which the investment was made, if the credit applied for is approved or if the amount of the credit has been reduced.

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