A pair of bills sponsored by Rep. Ryan Winkler (DFL-Golden Valley) would provide tax incentives designed to stimulate investment in biotechnology startup companies in Minnesota.
The first, HF3143, would create a 25 percent “angel investor” tax credit for those who invest in qualifying Minnesota-based biotech companies, with the total maximum statewide credit capped at $3 million. The second, HF3144, would prevent investors living outside the state who invest money in Minnesota biotech companies from having to pay state taxes on any investment gains.
Both bills would apply only to investments involving companies with fewer than 25 employees.
The House Biosciences and Emerging Technology Committee approved the bills Feb. 19 after hearing testimony from experts who said the state’s tax policies are partially responsible for stunting growth in its biobusiness sector.
John Alexander, president and CEO of Chameleon Scientific and chairman of the Twin Cities Angels investor group, said Minnesota has fallen dramatically behind other states in its ability to attract lucrative, high-tech bioscience companies.
Alexander advocated lower taxes, fewer regulations and greater investment in scientific and technical education to foster a friendlier climate for biotech.
Meanwhile, Michael Berman, who serves on the boards of 12 different medical technology companies, played down the importance of taxes and argued instead that the state should focus on creating “infrastructure” — a high-quality education system and research institutions capable of partnering with the private sector.
HF3143 now goes to the House Finance Committee and HF3144 to the House Taxes Committee. Neither bill has a Senate companion.