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Saturday, October 17, 2009

Investments that yield return benefit the State of Indiana


After living for several years in Washington, D.C., one of the things that I have come to appreciate here in Indiana is access to local and state Government officials and information pertinent to any given topic.

Due to the state of affairs for most of the cities in Indiana, the state has been exceptional at trying to develop and maintain programs that offer incentives to local businesses. I was introduced to one such program by former Director of the Flagship Enterprise, Art Patterson.

A couple of years ago as I was detailing my business plan, Art made me aware of the Venture Capital Investment Tax Credit. If you are like I was I had no idea that such a credit existed.

As described by the state, the Venture Capital Investment Tax Credit program improves access to capital for fast growing Indiana companies by providing individual and corporate investors an additional incentive to invest in early stage firms. Investors who provide qualified debt or equity capital to Indiana companies receive a credit against their Indiana tax liability.

The process involves the application ($200 fee) and certification of the receiving company and the approval and certification of the investor by the Indiana Economic Development Corporation. Once approved the investor is eligible for the lesser of two options, a tax credit of up to 20% of their investment or $500,000.

It is a viable option for presenting a capital campaign to potential investors. Your business may be in need of incentive based programs to increase your bottom line.

The state is at work to benefit you. I have found that a call to the Governor’s office or even Secretary of State has lead to information that has proven helpful. There are a list of categories that are deemed ineligible by the IEDC. It is worth looking into if you have been courting investors to raise capital for your business.

IEDC has other helpful information on grants , loans, and special programs at their website, www.in.gov/iedc/204.htm or call.

You may also view information that is helpful for starting a business at www.in.gov/iedc/StartingaBusiness.htm.

Times like these call for creative measures and by comparison to most states Indiana has things in place with hopes to strengthen the business culture of communities like ours.

IEDC’s Venture Capital Investment Tax Credit program is one of the few programs that I have found very few companies know about. The total amount of tax credits certified by the IEDC for any calendar year may not exceed twelve and a half million dollars ($12,500,000).

From an entrepreneurial perspective VCI Tax Credit is one of the most effective programs to stimulate investment in companies in Indiana.

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