Pennsylvania recently enacted the "Innovate in PA Tax Credit" program, which incentivizes early-stage venture capital investment in technology companies by selling deferred tax credits to insurance companies. The proceeds will be used to fund investments in the state in the technology sector and the insurance companies can trim their future state tax obligations.
The Innovate in PA Tax Credit program allows the Department of Community and Economic Development to sell up to $100 million in deferred insurance premium tax credits to qualified insurance companies. Of that, $85 million will be earmarked by the state for investments in start-up and early-stage technology businesses. Half of the sale proceeds will fund Ben Franklin Technology Partners (up to $42 million). The Pennsylvania Venture Capital Investment Program will receive 45 percent of the sale proceeds (up to $38 million) and the remaining 5 percent will support Pennsylvania's Life Sciences Greenhouses (up to $4.2 million).
These economic development programs, especially the Ben Franklin funding programs, are extremely important resources to emerging technology companies in Pennsylvania. This innovative legislation restores some of the much-needed funding for entrepreneurs that was temporarily lost as a result of state budget cuts.
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