On Wednesday, April 7, the Joint Standing Committee on Taxation tabled LD 229, An Act to Increase Investment Caps in the Maine Seed Capital Tax Credit Program. There are projects that will bring potential jobs and investment waiting for the outcome on this bill.
Maine’s seed capital tax credit program provides a powerful economic development tool for the state by encouraging equity and near-equity investments in Maine businesses directly and through private venture capital funds. In particular, the program supports Maine small businesses, entrepreneurships, and startup companies – something on which Maine prides itself. Investments may be used for fixed assets, research or working capital. The program encourages investors to commit capital to Maine companies that might otherwise be invested outside the state. These investments occur in some of Maine’s most exciting economic sectors such as manufacturing, advanced technologies, value-added resource enterprises, or visual media production companies.
Through the years, there has clearly been ongoing legislative support for this program. Last winter, the Maine Legislature and Governor Janet Mills approved via Public Law 2020, Chapter 616 (the supplemental budget), increased funding for the program, increasing the annual program limits from $5 million per year to $15 million per year. Raising the investment cap and expanding the annual program limits to $15 million was a key recommendation (Action Item C2) of the state’s 10-year economic development plan to promote innovation here.
The plan notes that this would likely help about 40 start-ups and create 2,300 new jobs. Each year, according to FAME, this program is responsible for the creation of up to 229 jobs with payroll of over $27.8 million and retains more than 530 jobs. Increasing the annual cap from $2 million to $3 million and the aggregate cap on eligible investment in one eligible business from $3.5 million to $6 million will only further the goal of growing Maine’s economy.
The committee’s next work session has not yet been scheduled. If you have any questions, contact Linda Caprara, by calling (207) 458-2133 or by emailing firstname.lastname@example.org.