Editor’s note: The following opinion piece was written by Dr. Jon Bartley (Dean of the NC State College of Management), Dr. Charles Moyer (Dean of the Wake Forest College of Management), Dr. Robert Sullivan (Dean of the UNC Chapel Hill Kenan-Flagler Business School) and Dr. Ernest Uhr (Dean of the East Carolina University School of Business) and submitted to Local Tech Wire by the North Carolina Electronics and Information Association.
RALEIGH- North Carolina is in the midst of its worst budget crisis in history. At the same time, North Carolina’s economy is transitioning from agriculture and manufacturing to information technology and life sciences. This transition is critical to the long-term health, growth, and prosperity of North Carolina.
An important catalyst for North Carolina’s technology economy is the Qualified Business Venture Tax Credit (“QBV Tax Credit”), which allows individuals up to a 25 percent state tax credit for investments in qualified small companies. The QBV Tax Credit is capped for individuals at $50,000 per year and for all taxpayers statewide at $6 million per year.
While North Carolina has become one of the leading high technology states, our State suffers from an acute shortage of venture capital, particularly seed capital. The QBV Tax Credit is specifically targeted to small business startups, and it has become an essential factor for many of those companies to receive initial funding from individuals known as “angel investors.”
In addition to encouraging investments in early stage technology companies, the QBV Tax Credit creates jobs in North Carolina and produces tax revenue for our State. Based upon a survey of companies that received investments as a result of the QBV Tax Credit that was conducted by the Council for Entrepreneurial Development (“CED”), the CED estimates that those companies created over 2,800 North Carolina jobs, had earnings of over $92 million, and paid over $11 million in North Carolina state income taxes. Additional jobs were created and state income taxes were paid by the many companies that provide services to these technology companies; thus creating a positive ripple effect throughout North Carolina’s economy.
The QBV Tax Credit will expire at the end of the year unless our State Legislature renews it. The renewal of the QBV Tax Credit is supported by the CED, the North Carolina Biosciences Organization, the North Carolina Electronic and Information Technologies Association, the North Carolina Citizens for Business and Industry, the National Federation of Independent Business, and the North Carolina Venture Capital Association.
Over the years, North Carolina has been blessed with progressive and visionary leadership. Please join us in encouraging our State Representatives and Senators to support House Bill Number 1520 and Senate Bill Number 1223 and to extend the QBV Tax Credit and help ensure North Carolina’s future as a leading technology economy.
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