Bills push tax credits for angel investors
Two state lawmakers are pushing legislation that would create a new tax credit benefitting investors in Massachusetts startup companies
TWO STATE LAWMAKERS are pushing legislation that would create a new tax credit benefitting investors in Massachusetts startup companies, particularly firms located in struggling areas of the state.
Rep. Claire Cronin, a Democrat from Easton, and Sen. Bruce Tarr, a Republican from Gloucester, filed bills establishing a tax credit for so-called angel investors. Cronin’s bill creates a personal income tax credit in an amount equal to 20 percent of the initial investment, increasing to 30 percent if the investment is in a firm located in one of the state’s 26 Gateway Cities. The angel investors can invest up to $125,000 in a single year with a $250,000 maximum for each qualifying business.
Cronin said her bill will increase economic growth and keep startup businesses in Massachusetts. “An angel investment is basically the gasoline that starts the engine of economic growth and job creation,” she said.
“I think we want to be competitive with our border states,” Cronin said. “Sometimes some of our border cities, the Lawrences the Lowells, have trouble keep business within Massachusetts. This provides them with one more tool.”Sen. Tarr’s bill, would establish a personal income tax credit of 15 percent for startup investors, expanding to 25 percent if the business is located in one of the state’s economic target areas, a designation that covers a large swath of Massachusetts. The total amount of credits issued under Tarr’s bill cannot exceed an annual cap of $10,000,000.
“The tax credit contained in the bill would encourage more investors to come off of the sidelines and get involved in growing the economy,” Tarr said in a statement. “It would provide job creators with the capital they need and might not otherwise get.”