Jefferson City, MO — Angel Tax Credits are one step closer to a reality in the state of Missouri. Bills offered by representatives Noel Torpey, R-29, and Denny Hoskins, R-54, would expand and create tax credits for seed-financing capital for emerging businesses throughout the state.
Torpey, who is from the Kansas City region, brought in Kansas City Mayor Sly James as his first witness on a bill he said would benefit the entire state and spark new businesses.
“Start up businesses have a serious difficulty getting the kind of capital they need,” Torpey said. “Banks and venture capitalists don’t invest in a business in the start up phase, but there are investors out there that are interested if we can just give them some incentive.”
More than half of U.S. states have Angel Tax Credits. Kristin Kenney, a lawyer who works exclusively for entrepreneurs and investors at Polsinelli Shugart law offices, said this made Missouri less competitive with their neighbors, and that Kansas City was a prime example of the potential of tax incentives and the damage in not implementing them.
“Lots of businesses are making the tough choice about whether to move into Kansas because of their new tax policies,” Kenney said. “Missouri LLC’s can’t get investment capital, so they end up moving and taking those jobs with them.”
Kenney said Square Inc, an electronic company manufacturing a device that can scan credit and debit cards from a mobile phone, started in St. Louis, but moved because they were struggling to get capital.
Kansas City Mayor Sly James testified that the issue was “relevant, important and pertinent to the whole state.” James said. He emphasized that the new tax credits, combined with Kansas City’s partnership with Google in the Google Fiber project, could create a “massive opportunity,” for technology, bioscience and data businesses to bring money and jobs into the state.
“We aren’t talking about giving tax breaks to companies making millions or billions every year,” James said. “This is about investing in individuals and ideas and allowing the entrepreneur to create the newest market and the newest product, this is the basis of all economic development.”
Support from the bill came from the NFIB, the Missouri Chamber of Commerce as well as Paul McKee of McEagle Properties. No action was taken on the bill.