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Missouri House considers angel investment tax credits

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Important economic development legislation was heard in the Missouri House Economic Development, Business Attraction and Retention Committee this week, gathering the support of the business community.

House Bill 2302, sponsored by Columbia Republican Caleb Rowden, would provide tax credits to investors that provide early stage “angel” capital to qualified employers in the state and would be administered by the Missouri Technology Corporation (MTC) with the primary goal of encouraging individuals to provide seed-capital financing for emerging Missouri businesses engaged in the development, implementation, and commercialization of innovative technologies, products, and services. This bill, unlike many tax credit bills, has a six year sunset provision.

Several states have similar tax credits including many in the Midwest.

“American startup creation as a whole is in decline and has been for a number of years,” Rowden explained. “The problem isn’t a lack of ideas, it’s a lack of capital to make those ideas happen. Startups are inherently risky and getting banks to put up the funding can be difficult.”

The advantage of angel investors is that most times when an investor becomes involved they stay involved with the business and continue to mentor the up and coming business owner.

“You can have a great idea, but without a little bit of seed money or a little bit of assistance, you won’t be able to get the idea off the ground,” said Tracy King, vice president of governmental affairs for the Missouri Chamber. “Due to other states around us having these tax credits, we see these great ideas moving out of Missouri and into those other states to get assistance.”

The Missouri Chamber has a long standing position in favor of angel investment tax credits and has testified on similar legislation in past legislative sessions. For more information about tax issues, please contact King at tking@mochamber.com or by phone at 573.634.3511.

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