§ 42-64.33-3. Tax credit established. (a) Upon making a capital investment in a small business development fund, a small business fund investor earns a vested right to a credit against the entity's state tax liability that may be utilized on each credit allowance date of the capital investment in an amount equal to the applicable percentage for the credit allowance date multiplied by the purchase price paid to the small business development fund for the capital investment. The amount of the credit claimed by any entity shall not exceed the amount of the entity's state tax liability for the tax year for which the credit is claimed. Any amount of credit that an entity is prohibited from claiming in a taxable year as a result of this section may be carried forward for a period of seven (7) years. It is the intent of this chapter that an entity claiming a credit under this section is not required to pay any additional tax that may arise as a result of claiming the credit.

(b) No credit claimed under this section shall be refundable or saleable on the open market. Credits earned by or allocated to a partnership, limited liability company, or S- corporation may be allocated to the partners, members, or shareholders of the entity for their direct use for state tax liability as defined in this chapter in accordance with the provisions of any agreement among the partners, members, or shareholders, and a small business development fund must notify the corporation of the names of the entities that are eligible to utilize credits pursuant to an allocation of credits or a change in allocation of credits or due to a transfer of a capital investment upon the allocation, change, or transfer. The allocation shall be not considered a sale for purposes of this section.

(c) The corporation shall provide copies of issued certificates to the division of taxation.

History of Section. (P.L. 2019, ch. 88, art. 12, § 10.)