$105M Tech Tax and VC Legislation Passes in Vermont

Capital for start-up and early-stage business ventures should become more plentiful in Vermont based on legislation, S. 178, passed in late May. A spokesperson for Governor Jim Douglas appraised the act's total impact as representing a $105 million investment into the state's economy.

Injecting more higher risk investment capital into the state's economy had been one of the key economic development priorities for Gov. Douglas during his first legislative cycle. The cornerstone of the Douglas Plan for Prosperity was to recapitalize and expand the financing mechanisms offered by the Vermont Economic Development Authority, the state's commercial and agricultural low-interest lending agency. S. 178 raises the state's commitment to the fund from $25 million to $70 million.

The legislation also enacts new tax credits and amendments to encourage angel investment and development of sustainable energy technologies, including:

• a sustainable technology R&D tax credit against a small corporation's income tax liability of up to 30 percent of qualified sustainable energy R&D expenditures;
• a sustainable technology export tax credit against a small high tech corporation's income tax liability, with the rate or amount based on the type of corporation; and,
• allowing capital gain rollovers for certain angel/venture capital investments up to $200,000 by one person.

S. 178 is available at: http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/passed/S-178.HTM

The Douglas Plan for Prosperity is available at: http://www.gov.state.vt.us/pdf/VEDA_plan.pdf