Gov. Doyle: Announces new program to defer capital gains tax, promote tech biz investment

Contacts: Laura Smith, Office of the Governor, 608-261-2162

Tony Hozeny, Department of Commerce, 608-267-9661

MADISON – Governor Jim Doyle today encouraged businesses to take advantage of the new Qualified New Business Venture (QNBV) Cap Gains Program that will go into effect on January 1, 2011. The program, created by the Governor and administered by the Department of Commerce, allows investors with long-term capital gains to use the proceeds of those gains to invest in Wisconsin companies developing new products or processes or conducting research and development. Commerce Deputy Secretary Zach Brandon made the announcement on behalf of the Governor at a Wisconsin Innovation Network event in Madison.

“As Governor, I have worked hard to make Wisconsin a preferred location for technology businesses and drive investment in Wisconsin companies,” Governor Doyle said. “This new program gives investors a choice for managing capital gains and attracts additional financial support for our fast-growing technology sector.”

Governor Doyle has taken steps to spur creation of risk capital in Wisconsin, including investor tax credits, the formation of the Wisconsin Angel Network and the Wisconsin Venture Fund to help facilitate deal flow, investor exchanges and network creation. The Governor expanded the investor tax credit law, raising the cap on tax credits for angel investments from $1 million to $4 million; tripling the annual pool of angel credits; and allowing angel investors to claim the entire 25 percent credit on their investment in the first taxable year.

In May, Governor Doyle signed the CORE Jobs Act building on his Accelerate Wisconsin plan by creating and expanding a number of tax credit programs for angel and venture capital investments. When combined with advances from his last budget, the CORE Jobs Act increases the amount available for angel and venture tax credits from $6.5 million to more than $40 million annually – more than a 600 percent increase. The bill also strengthens successful programs for manufacturing, research and development, and worker training.

Commerce certifies technology businesses for eligibility as QNBVs annually. Investors that make investments in companies certified under this program can defer 100 percent of Wisconsin Capital Gains Tax. Businesses engaged in developing new products or business processes, are in the manufacturing or agriculture industries, or are processing and assembling products and are conducting research and development activities may be eligible to be certified under the program. Investors can defer up to $10 million in capital gains.

For more information about this program, visit http://commerce.wi.gov/BD/BD-Act255-QNBVCapGains.html. To apply, contact john.stricker@wisconsin.gov.