This text of North Dakota § 57-38.5-03 (Seed capital investment tax credit) is published on Counsel Stack Legal Research, covering North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
If a taxpayer makes a qualified investment in a qualified business, the taxpayer is entitled to
a credit against state income tax liability under section 57-38-30 or 57-38-30.3.
1.The amount of the credit to which a taxpayer is entitled is forty-five percent of the
amount invested by the taxpayer in qualified businesses during the taxable year.
2.The maximum annual credit a taxpayer may claim under this section is not more than
one hundred twelve thousand five hundred dollars. This subsection may not be
interpreted to limit additional investment by a taxpayer for which that taxpayer is not
applying for a credit.
3.Any amount of credit under subsection 1 not allowed because of the limitation in
subsection 2 may be carried forward for up to four taxable years after the taxable year
in wh
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If a taxpayer makes a qualified investment in a qualified business, the taxpayer is entitled to
a credit against state income tax liability under section 57-38-30 or 57-38-30.3.
1. The amount of the credit to which a taxpayer is entitled is forty-five percent of the
amount invested by the taxpayer in qualified businesses during the taxable year.
2. The maximum annual credit a taxpayer may claim under this section is not more than
one hundred twelve thousand five hundred dollars. This subsection may not be
interpreted to limit additional investment by a taxpayer for which that taxpayer is not
applying for a credit.
3. Any amount of credit under subsection 1 not allowed because of the limitation in
subsection 2 may be carried forward for up to four taxable years after the taxable year
in which the investment was made.
4. A passthrough entity that invests in a qualified business must be considered to be the
taxpayer for purposes of the investment limitations in this section and the amount of
the credit allowed with respect to a passthrough entity's investment in a qualified
business must be determined at the passthrough entity level. The amount of the total
credit determined at the passthrough entity level must be allowed to the partners,
shareholders, or members in proportion to their respective interests in the passthrough
entity.
5. An investment made in a qualified business from the assets of a retirement plan is
deemed to be the retirement plan participant's investment for the purpose of this
chapter if a separate account is maintained for the plan participant and the participant
directly controls where the account assets are invested.
6. The investment must be made on or after the certification effective date and must be at
risk in the business to be eligible for the tax credit under this section. An investment for
which a credit is received under this section must remain in the business for at least
three years. Investments placed in escrow do not qualify for the credit.
7. The entire amount of an investment for which a credit is claimed under this section
must be expended by the qualified business for plant, equipment, research and
development, marketing and sales activity, or working capital for the qualified
business.
8. A taxpayer who owns a controlling interest in the qualified business or who receives
more than fifty percent of the taxpayer's gross annual income from the qualified
business is not entitled to a credit under this section. A member of the immediate
family of a taxpayer disqualified by this subsection is not entitled to the credit under
this section. For purposes of this subsection, "immediate family" means the taxpayer's
spouse, parent, sibling, or child or the spouse of any such person.
9. The tax commissioner may disallow any credit otherwise allowed under this section if
any representation by a business in the application for certification as a qualified
business proves to be false or if the taxpayer or qualified business fails to satisfy any
conditions under this section or any conditions consistent with this section otherwise
determined by the tax commissioner. The commissioner has four years after the due
date of the return or after the return was filed, whichever period expires later, to audit
the credit and assess additional tax that may be found due to failure to comply with the
provisions of this chapter. The amount of any credit disallowed by the tax
commissioner that reduced the taxpayer's income tax liability for any or all applicable
tax years, plus penalty and interest as provided under section 57-38-45, must be paid
by the taxpayer.
10. An angel fund that invests in a qualified business must be considered to be the
taxpayer for purposes of the investment limitations in this section. The amount of the
credit allowed with respect to an angel fund's investment in a qualified business must
be determined at the angel fund level. The amount of the total credit determined at the
angel fund level must be allowed to the investors in the angel fund in proportion to the
investor's respective interests in the fund. An angel fund that is subject to the tax
imposed under chapter 57-38 is not eligible for the investment tax credit under this
chapter.