• Join your peers at SSTI's 2024 Annual Conference!

    Join us December 10-12 in Arizona to connect with and learn from your peers working around the country to strengthen their regional innovation economies. Visit ssticonference.org for more information and to register today.

  • Become an SSTI Member

    As the most comprehensive resource available for those involved in technology-based economic development, SSTI offers the services that are needed to help build tech-based economies.  Learn more about membership...

  • Subscribe to the SSTI Weekly Digest

    Each week, the SSTI Weekly Digest delivers the latest breaking news and expert analysis of critical issues affecting the tech-based economic development community. Subscribe today!

Crowdfunding Exemptions, Tax Credits Among Capital Programs Passed by State Policymakers

June 26, 2014

This article is part of SSTI's series on trends in state technology-based economic development legislation in 2014. Read our other entries covering legislative action on patent reform, research capacity, technology commercialization & infrastructureworkforce & STEM and manufacturing & clusters.

Several states announced new or expansions to existing capital programs during the 2014 legislative session. The proposals targeted increasing and supporting venture/risk capital in the state; angel tax credits to spur investment in targeted sectors; and, intrastate crowdfunding exemptions to increase access to capital for startups and business expansion.

States announce initiatives to increase risk capital
The Nebraska Legislature and Gov. Dave Heineman approved LB 1114, a bill that would allocate $50,000 to support and increase venture capital in the state. The $50,000 would include support and analysis of best practices in other states. An accompanying report is scheduled to be completed by December and include policy recommendations to increase and cultivate venture capital in Nebraska. The bill also extends the Business Innovation Act’s expiration date by five years to 2021. The Business Innovation Act commits $7 million each year for grants to small businesses (See related Digest article).

As part of the Vermont FY15 budget, The Vermont Entrepreneurial Lending program received $500,000 to increase the availability of risk capital for companies working in knowledge-based fields, including renewable energy, advanced manufacturing, wood products manufacturing, and value-added agricultural processing (see related Digest article)

Angel tax credits to spur job creation
In May, Gov. John Hickenlooper signed the Advanced Industries Investor Tax Credit (HB14-1012) into law. The angel tax credit provides up to $50,000 in state income tax credit for qualified investors who make an investment of $10,000 or more to early stage, qualified Colorado-based companies who fall within specified advanced industries sectors (see related Digest article).

A measure to extend Minnesota’s Angel Tax credit two more years and add funds was signed into law by Gov. Mark Dayton. The bill increases the yearly allotment from $12 million to $15 million and adds an additional $3 million this year. (see related Digest article)

An expansion to the New Mexico Angel Tax Credit (HB 94) proposed by Gov. Susan Martinez was postponed indefinitely. The proposal aimed to raise the maximum individual investment cap from the current, $100,000 to $250,000 in investments for up to five companies. This raises the overall credit from $750,000 to $2 million.

Intrastate crowdfunding trend continues in 2014
In 2014, several states joined the growing number of states that passed intrastate crowdfunding exemptions, security exemptions that allow businesses to raise money from citizens of the state without registering for a public offering. In February, Maine passed LD 1512 starting a trend that would see five other states pass exemptions during their legislative sessions (see related Digest article).  Shortly after, Washington passed HB 2023 that enables businesses to raise up to $1 million through crowdfunding websites. Since March, four other states have passed legislation, including Alabama (SB 44), Indiana (SB 375), Maryland (SB 811), and Tennessee (SB 1481). 

state budget, elections, capital