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Tax Credits for Investments
Three types of tax credits specifically related to venture capital investments in Iowa are listed below:
- Iowa Community Based Seed Funds — These funds encourage local investors to take equity positions in Iowa businesses. Investors may receive either a 6% tax credit for setting up a qualified seed fund or a 20% tax credit for investing in approved Iowa companies. To apply for this tax credit, visit the the Department of Revenue Web site [www.state.ia.us/tax/business/VentureCapital.html].
- Endow Iowa — Endow Iowa was developed to encourage the growth and development of community foundations and related organizations in the state, by encouraging donations to non-profit organizations. Individuals, businesses, and financial institutions are eligible for a state tax credit equal to 20% of the amount donated for donations to an Endow Iowa Qualified Community Foundation, or to a qualified Community Affiliate Organization, up to a maximum credit of $100,000 per individual. There is $2 million available for Endow Iowa per year for 2006, 2007, and 2008.
- Revolving Loan Funds — The Revolving Loan Program was developed to encourage the growth and development of economic development revolving loan funds in Iowa. Individuals, businesses, or non-profit organizations are eligible for a state tax credit equal to 20% of the amount they donate to the Revolving Loan Fund. The credit is refundable for organizations that are exempt from federal income tax pursuant to section 501©(3) of the IRS Code. There are over $2 million per year in new credit authority.
Download the 2006 Regional Revolving Loan Fund Tax Credit Application.
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