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‘We think it’s very important to have this tax credit program on the books,’ says Donald C. Fry, president and CEO of the Greater Baltimore Committee, which has been among the biggest supporters of the Angel Investor Tax Credit Program. (File photo) (File photo)

Could a Md. tax credit program bill for angel investors pass this year?

While Maryland’s business community was largely pleased with last year’s General Assembly session, one of their disappointments was that a tax break for angel investors did not pass.

But the Angel Investor Tax Credit Program has returned this year to Annapolis. The bill once again would create a tax credit against the state income tax for people who invest in certain Maryland businesses. The credit would be equal to 50 percent of the qualified investment, not exceeding $50,000 for an individual investor and $100,000 for married couples.

Business groups supporting the bill have kept it atop their legislative agenda this year.

“We think it’s very important to have this tax credit program on the books,” said Donald C. Fry, president & CEO of the Greater Baltimore Committee, which has been among the bill’s biggest supporters.

The new bill, which has not been introduced yet, will contain some modifications from last year’s version, including a list of nine business sectors referred to as a “qualifying innovation business” that will fall under the proposed tax credit program, such as those dealing with electronic device technology, health and medical technology, nanotechnology, clean energy and natural resources and information technology.

Qualified businesses must also be headquartered and have base-operations in Maryland. More than half of the company’s employees must be employed in the state and more than half of the company’s payroll must be for in-state employees. Also, the company’s annual revenue must be less than $5 million and have been an active business for no longer than five years.

The bill was cross-filed last year by Baltimore lawmakers Del. Brooke Lierman and Sen. Catherine Pugh, both Democrats.

The modified bill will also have a sunset provision which will allow lawmakers to revisit the tax credit after three years, said Lierman, who plans to sponsor this year’s legislation.

Publicly traded companies and companies that qualify for the Maryland Biotechnology Investment Tax Credit or the Cybersecurity Investment Tax Credit cannot get investments under the Angel Investor Tax Credit program.

Angel investors fill a space once occupied by venture capitalists, according to a report by the NGA Center for Best Practices. They typically put money into new companies while venture capitalists go for more established ones. The NGA report also found that angel investments make up 90 percent of early-stage equity not obtained from friends or family.

Venture capitalists invested in fewer companies but invested more money in 2015, said a report by PriceWaterHouse Coopers and the National Venture Capital Association released last week. More than $337 million of the $820 million invested last year went to more-established companies.