Kansas’ angel tax credit is set to expire at the end of this year, but supporters say there’s still time to save it.
A House committee just passed an amended bill that would extend the tax credit for another five years. The full House could vote on the measure as soon as Monday or Tuesday, said Melissa Roberts of the Enterprise Center of Johnson County.
Right now, an accredited investor can claim a 50 percent tax credit on an angel investment worth up to $50,000 in a qualified Kansas company. An investor can receive no more than $250,000 in tax credits per tax year. The program is capped at $6 million per year.
For every $1 in tax revenue that Kansas foregoes in angel tax credits, another $15 in economic benefits is created in the Sunflower State.
The angel tax credit happens to be one of the few incentives that Kansas has for attracting, retaining and funding high-potential companies. Missouri, meanwhile, has several programs, such as the Missouri Technology Corporation’s IDEA Funds.
Lose the tax credit, and Kansas could see an exodus of the next generation of high-growth companies. Plus, the state technically isn’t spending any money.
“We’ve found that the argument for this bill essentially speaks for itself,” Roberts said.
This isn’t a normal year in the legislature, though.
Kansas is facing a huge budget shortfall this year and next, and elected officials are turning over rocks to find money. But eliminating the angel tax credit wouldn’t have an impact on tax receipts until 2018, Roberts said.
The bill passed this week by the House committee actually originated in the Senate, and it didn’t mention the angel tax credit until the House amended the language. If the full House passes the bill, it will still need to go to a conference committee where House and Senate negotiators will have to come to terms.
So what can supporters do? Roberts encouraged Kansas entrepreneurs to contact their state representatives, as well as House Speaker Ray Merrick and House Majority Leader Jene Vickrey, to emphasize their support for extending the tax credit.
