Months of hard work by Kansas City entrepreneurs has paid off.
Kansas Gov. Sam Brownback on Wednesday signed an extension of the Angel Investor Tax Credits into law, preserving what supporters say is the state’s only financial incitive specifically for startups. The law goes into effect on July 1, 2016.
Kansas Senate Bill 149 will extend the life of the Angel Investor Tax Credits program through 2021. The $6 million annual program offers accredited investors a tax credit of up to $50,000 on an investment in a Kansas business, helping to mitigate risk and encourage investments.
Melissa Roberts, a key support organizer of the program, said the tax credits program is a model of entrepreneurial growth from which other states can learn.
“The angel investment tax credit’s passage was an all-too-rare example of bipartisan support for a common-sense incentive,” said Roberts, marketing director for the Enterprise Center of Johnson County. “This tax credit has been a pillar of our state’s strategy to encourage entrepreneurial growth since it was enacted in 2006. Now, this essential incentive will be available to help more Kansas companies leverage private capital to grow revenues and create jobs.”
In early May, Lawmakers in the Kansas House passed the measure 100 – 21 while the Senate voted 35 – 5 in favor of the bill. The largest complicating factor for the future of the program had been Kansas’ ongoing budget crisis. The Sunflower State is facing a more than $600 million budgetary shortfall, which resulted from the legislature’s slashing of personal income taxes in 2012 and 2013.
The Kansas City Area Life Sciences Institute, Polsinelli, ClaimKit, Welltodo, ELIAS Animal Health and several other organizations banded together to offer vocal support of the angel tax credits. BioKansas CEO Dennis Ridenour’s organization was also a part of the lobbying effort to renew the program.
“The renewal of the angel investor tax credit is a great win for the entrepreneurial community in Kansas,” Ridenour said. “It would have been easy for the state to just let this program sunset, but both the legislature and the Governor saw the positive impact of the program and took decisive action. We’re excited to watch this program continue to provide a big ROI over the next five years in regards to economic development, job creation and investments from outside the state.”