Small business owners say Minnesota’s recent $60 million angel investor tax credit bill will help improve the business climate in the state and encourage the growth of startups.
The credit offers a 25 percent tax credit for investments in high-technology small businesses in the state, and it will provide a refund if the credit is more than the investor’s actual tax liability.
The credits are distributed on a first-come, first-serve basis. The program has $11 million in credits for 2010 and $12 million each year from 2011 through 2014.
Minnesota Representative Erik Paulson told Minnesota Public Radio that the credit is an important step to encourage investments in entrepreneurs looking to start a corporation in Minnesota. According to Paulson that U.S. angel investors invested $19 billion dollars in 2008, and nearly two-thirds of that went to small businesses.
The Star-Tribune says state delegates went to a bio-technology convention held shortly after the legislation passed. They gave attending investors bags of candy labeled “Minnesota’s angel tax credit. One sweet deal!”
Neighboring Wisconsin also has an angel investment tax credit. One official told the Star-Tribune that the competition between the two states was like a sibling rivalry over small business investment.
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