There could be good news ahead for Indiana startups. As long as House Bill 1008 is able to clear Congress, Indiana’s economic development will see a boost through changes to theVenture Capital Tax Credit.
Introduced by Representative Jerry Torr and co-authored by 83rd District State Representative Kathy Heuer of Columbia City, House Bill 1008, if passed, will up the maximum credit from $500,000 to $1 million. Plus, it will cut the $200 application fee for businesses, and simplify the application process altogether.
“The inability for business organizations to have access to start-up capital has posed a big problem for Hoosier companies. We need incentives to draw investment in Indiana businesses,” said Heuer. “By doing this we can improve the flexibility of economic development incentives available to Indiana businesses.”
The Venture Capital Investment Tax Credit is designed to entice investors into unproven high-tech ventures. It is available to individuals or entities with state tax liability that apply to the Indiana Economic Development Corporation (IEDC) for certification. Since 2003, a total of 208 companies have benefited from the program. Although it’s a smaller selection of startups that cap out at a $500,00 credit – 20 of the 208 companies so far – those behind the bill believe it is nonetheless important.
“There were several times when a particular company hit $500,000 of credits,” said Bruce Kidd, senior vice president of Indianapolis-based Walker Information and a former director of small business and entrepreneurship at the Indiana Economic Development Corp. “Frankly, that wasn’t really enough for some of these early-stage, but high-potential companies that were raising millions of dollars. It really is a catalyst for larger investments.”
Indiana Secretary of Commerce Mitch Roob, who is also supportive of the measure, is hopeful that the Republican-backed bill will pass.“Quite candidly, our preference is that the money come[s] from Indiana,” he said. “And the reason for that is those [out-of-state] investors occasionally want to move those companies outside Indiana.”
Now it’s Illinois’ turn.