State Tax Credit Incentive for Equity Investments: A Survey of Current Practices

Venture capitalists have helped create vibrant entrepreneurial economies in cities and regions such as Silicon Valley, Route 128 in Massachusetts, Austin and San Diego. In recent years, a few states without this established equity investor base and seeking community economic development have adopted tax incentives for direct investment into local businesses and/or into seed capital funds. This paper examines the eighteen states that have adopted such tax credit programs.