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Minnesota Direct Financial Incentives 2011

Minnesota's economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include an angel investment tax credit and the Minnesota Job Skills Partnership.

March 2011
Angel Investment Tax Credit:
In 2010, Minnesota created a new investment tax credit for early-stage companies. Funded at $59 million over five years, the program provides a 25 percent income tax credit for investments into qualified technology businesses. A unique feature of the program is that the credit can be "refundable," meaning that an investor who has no tax liability in Minnesota can make an investment into a qualified Minnesota firm and receive a full refund for the eligible credit amount.

Job Opportunity Building Zone Program:
Tax-free zones have been established in the area outside the seven-county Twin Cities metropolitan region to promote job creation and business development. Businesses locating or expanding in these zones will receive exemption from most taxes. Tax exemptions include corporate income tax, sales tax on goods and services purchased for use in the zone, and commercial/industrial property taxes; for certain higher-paying positions, the business will receive tax credits for job creation.

Minnesota Investment Fund:
For businesses acquiring "fixed assets" (such as equipment, buildings, and land) and adding new workers as a result. This program provides companies below-market financing. Virtually all types of businesses are eligible, excluding retail enterprises.

Minnesota Job Skills Partnership:
Provides state grants to educational institutions for the development of training programs that meet specific business needs. The board also operates the Higher Education Loan Program (HELP), through which businesses may be awarded an interest-free loan to pay for worker training, and operates the Pathways Program, which provides grants for the development of training programs for individuals transitioning from public assistance to work.

Small Business Development Loan Program:
For established manufacturers with fixed asset expansion costs in excess of $1 million and adding a substantial number of new jobs. Through industrial development bonds, the Agricultural and Economic Development Board can support a loan at below market interest rates.

Infrastructure assistance:
The Greater Minnesota Business Development Public Infrastructure Grant Program provides up to 50 percent of the capital costs of the public infrastructure to help support the economic success of communities outside the seven-county metropolitan area. The Bioscience Business Development Public Infrastructure (BBDI) Program provides grants to local governmental units for up to 50 percent of the capital cost of the public infrastructure necessary to expand or retain jobs. The Small Cities Development Program awards grants to help develop or redevelop small communities through new or rehabilitating existing housing, constructing or rehabilitating public infrastructure, and assisting businesses and industries.

Minnesota State Contact:
Mark Lofthus
Minnesota Department of Employment and Economic Development
Business and Community Development Division
First National Bank Building
332 Minnesota Street
St. Paul, MN 55101
(800) 657-3858 or (651) 259-7432

Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.

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