Michigan to stop venture tax breaks
Posted on 01 July, 2015 by James Mawson, editor-in-chief
The state House Commerce and Trade committee has seen legislation to close a programme started in 2003 aimed at attracting venture capitalists by giving tax vouchers to banks to lend to VCs doing deals in the state.
US state of Michigan has passed two bills to limit or end venture capital incentives.
The state passed two bills, HB 4195 and 4196, after the results of the tax vouchers given to banks since 2003 to lend to venture deals was analysed by the House Fiscal Agency.
The Venture Michigan Funds received about $450m from the banks, resulting in lending of $150m to 41 startup companies with about $140m still due, according to the agency.
State Rep. Al Pscholka, R-Stevensville led the bills, which prohibit any more money from being invested in venture capital firms and ensure that as the loans are repaid that the money comes back to the state, said: “The Venture Michigan fund was started with all the right motives. But venture capital is by nature a risky investment and we should not be risking taxpayer dollars.”
The Michigan Venture Capital Association said venture capital firms had invested in more than 120 companies that have created 2,000 jobs in the state.
See more from this Government Report: Michigan (MI), US
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