The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Tag Archives: Tennessee

New Tennessee State Tax Credits Incentivize Venture Fund Investments

Tennessee_state_flagThe Tennessee legislature passed a bill earlier this month that indirectly creates $120 million of venture funding.  It gives tax deductions to insurance companies that invest in qualified entities called “TN Investcos” which are in turn instructed to make “focused investments of capital in early or seed stage companies with high growth potential.”  Firms that meet the requirements and are interested in being one of the six Investcos apply to the Tennessee Department of Economic and Community Development.  The companies receiving TN Investco funds must:

  • be independently owned and operated and headquartered in Tennessee,
  • conduct its principal business operations in Tennessee, and
  • have at least 60% of its employees located within Tennessee. 

Restrictions include:

  • no more than 100 employees, and 
  • not principally engaged in professional accounting, medical, or legal services; banking or lending; real estate development; insurance; oil and gas exploration; or direct gambling services. 

According to a memo on the legislation by Tennessee law firm Waller Lansden, a similar $100 million tax credit program started in 2004 in Alabama has “created 781 jobs bearing an average annual wage of $40,628″ and “generated more than $32 million in new annual payroll for the state.”

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