Preconsidered Res. No. 1380
Resolution calling upon the New York State Legislature to introduce and pass, and the Governor to sign, legislation which would authorize any city having a population of one million or more to provide an angel investor credit against the unincorporated business tax and personal income tax of such city for certain qualified emerging companies and medical technology companies.
By Council Members Recchia, Fidler, James and Koo
Whereas, Angel investors are affluent individuals who provide personal capital to start-up companies, often through a trust, fund, or business, and who are distinct from venture capitalists who invest other persons' capital; and
Whereas, Angel investors are particularly critical for small start-ups seeking capital, because most venture capital funds are not interested in investments of less than $1 million; and
Whereas, Angel investors in the United States account for almost as much in the aggregate as those of venture capitalists, while furnishing capital to twenty times as many businesses; and
Whereas, In 2010, healthcare/medical firms accounted for 30% of angel investments, and biotech firms comprised 15% of angel investments; and
Whereas, Angel investors can be a significant source of job growth over time; and
Whereas, Over 20 states, including New Jersey, have some form of angel investor credit; and
Whereas, There is not currently an angel investment tax credit or other incentive program which specifically targets investment in the biotechnology and medical technology sectors in New York; and
Whereas, Such a credit would aid in the formation of promising firms by lowering their cost of capital from angel investors; and
Whereas, Biotechnology and medical technology businesses create good, high-paying jobs; and
Whereas, The biotechnology and medical technology sectors complement New York City's university and hospital-based research sectors; and
Whereas, An angel investor tax credit for biotechnology and medical technology would attract capital to a promising sector in the City and could be viewed as part of a long term effort to diversify the City's economy; and
Whereas, The enactment of an angel investor tax credit by New York City would require authorizing state legislation; and
Whereas, Such an angel investor tax credit should allow qualified investors to receive an angel investor tax credit against the unincorporated or city personal income tax; and
Whereas, Such a credit should be 2% per each qualified investment made during a taxable year and the next 4 years, up to $20,000 per taxable year, and $100,000 in the aggregate for all years taken; and
Whereas, The aggregate amount of tax credits allowed shall be up to $3 million, allocated by the New York City department of finance among taxpayers in order of priority based upon the date of application; now, therefore, be it
Resolved, That the Council of the City of New York calls for the New York State Legislature to introduce and pass, and the Governor to sign, legislation which would authorize any city having a population of one million or more to provide an angel investor credit against the unincorporated business tax and personal income tax of such city for certain qualified emerging companies and medical technology companies.