Heading to the Governor for signature is HB 5921 the Small Business Investment Tax Credit bill. Finally there is a credit Michigan Angels can use. A big SHOUT OUT to Representative Ellen Lipton for proposing this bill and pushing it all the way to the goal line. This legislation may prove to be one of the most important programs that will release the millions of private capital in Michigan that is currently sitting on the sidelines. It also makes our early stage companies competing for private equity competitive with counterparts in Ohio, Illinois, Wisconsin and Minnesota.
The processes and procedures that investors need to follow to obtain the credit still need to be approved so it will be a month or so before companies and investors can start applying. SPARK will have programs explaining the criteria and procedures, for companies and investors, in January, as soon as all the details are worked out. Stay tuned for information about those events.
In a nutshell this credit will give qualified individual investors in qualified companies in 2011 and 2012 a 25% tax credit against their MI tax liability for each dollar (minimum $20,000) invested in a MI early stage company. The credit must be used over at least two years but can be spread over 5 years. Maximum of $500,000 of investments are eligible for a single investor, but it is cumulative over multiple investments.
Stay tuned for more.