LANSING – Michigan lawmakers last week introduced legislation to restore a state angel investment tax credit that would allow an investor to receive a 20-percent tax credit against the state’s personal income tax for qualified angel investments.
The two bills were sponsored by state Rep. Jeff Farrington, a term-limited Republican from Macomb County. Farrington’s bills comes five years after Michigan’s previous angel investment credit of 25 percent on the personal income tax was eliminated as part of a broad rewrite of the state’s business tax code that ended most credits for business.
The legislation has the backing of the Michigan Venture Capital Association that views the credit’s restoration as needed to further grow the number of angel investors in the state who put money into startup companies and provide support and mentorship to entrepreneurs.
MVCA Executive Director Maureen Miller Brosnan also would like to see the state support angel investing beyond the tax credit by focusing as well on investor education and network development.
“We’re going to spend quite a bit of time working with legislators trying to build an angel investment program,” Miller Brosnan said. “We still have a job to do. Michigan is one of the fastest-growing states in terms of angel investment, but we still have people of individual wealth that don’t understand it and that this is an opportunity that they could be taking advantage of.”
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