Good news for all of the New York City-based startups out there: A new bill under discussion in the New York State Assembly would give angel investors a sizable tax credit for investing in your company.
The Angel Investor Tax Credit, proposed by Democratic Assemblymember Micah Kellner, would give a 25% tax credit to investors who put between $25,000 and $1 million of their money behind a New York City-based startup. 60% of the startup’s employees must be based in the city for the company’s investors to qualify for the credit.
Kellner, whose district includes Cornell University’s recently announced Roosevelt Island technology campus, told Mashable that his proposed tax credit would add fuel to the New York startup scene’s fire (one recent study suggested that New York has surpassed Boston, M.A. as the fastest-growing startup hub in the country).
“If we’re going to have this amazing new technology campus, and if we’re going to be ‘Silicon Island,’ we need to make sure startups have the opportunity to get into their teenage years, so to speak,” said Kellner. “And one way to do that is to make sure there’s incentives to invest in New York startups.”
Kellner pointed out that other states which have similar incentives, such as Connecticut and Wisconsin, have seen boosts in angel investments of up to 500% over five years. He’s also worried that such incentives granted by other states — particularly those of nearby Connecticut — attract startups and investors away from New York City.
“We have great success investing in companies in New York, and we don’t want companies going elsewhere because they want competitive tax credits,” he said. “The last thing I want is the next Twitter or Facebook being developed in New York, only to be commercialized and have their company headquarters end up in Connecticut. [Startup jobs] are good jobs and I want them here in New York.”
Currently, the bill is being debated in the Democrat-controlled Assembly’s Ways and Means committee, which writes the state’s tax legislation.
Albany is notorious for its partisan political gridlock, but Kellner’s got an ally on the other side of the asile that should help move the tax credit forward. Republican State Senator Joseph Robach is sponsoring the bill in the Republican-dominated State Senate because, according to Kellner, Robach represents the University of Rochester, one of New York State’s most prominent technology campuses.
Kellner’s overall goal is to promote New York City’s technology startup culture and entrepreneurial spirit, which he believes is key to strengthening New York State’s economy as a whole.
“We need to diversify our economy in New York State; we’re way too reliant on the financial industry,” he said. “25% of the state’s tax revenue is generated south of fourteenth street. We need to diversify, and this tax credit is a great way to do that.”
Kellner’s bill can be viewed right here.
Are you in favor of a tax credit to promote startup investments? Let us know in the comments below.
Image courtesy of iStockphoto, lightkeeper
More About: new york city, Politics, Small Business, Startups, US
via Mashable! http://feedproxy.google.com/~r/Mashable/~3/DUDPm-OaD-c/
