Angel investor bill aimed at creating small businesses passes House committee
02/09/2012 11:04 AM
Legislation to provide tax credits for “angel investors” who provide start-up cash for small businesses in Kentucky unanimously cleared its first hurdle in the House Committee on Economic Development on Thursday.
The bill is seen as way to attract investors in small businesses — those with fewer than 100 employees — that have more than 50 percent of its assets, operations, and employees located in the commonwealth.
To qualify for the 50 percent tax credits, investors must put in at least $10,000 to the company. They can’t own more than 20 percent of the firm and can’t be employed by the business before making the investment, according to House Bill 113.
The bill got a shout-out from Gov. Steve Beshear in his State of the Commonwealth Address. And its sponsor, state Rep. Arnold Simpson, D-Covington, sees the bill as a chance to create more jobs and thus jump-start the economy in many communities.
Another facet of the bill is the fact that the “angel investors” can actively help with the start up of the business. Because many of these investors are successful business people in their own right, it would potentially lead to more of the businesses succeeding.
If individuals were to invest in a business in 2013, they wouldn’t receive the tax credit until 2015, which means that communities in the state would get the injection of capital and jobs two years before the credit is issued.
The bill now heads to the House floor.
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