Lee News – Branstad proposes tax incentives for entrepreneurs

ANKENY – Former Gov. Terry Branstad on Tuesday proposed state tax waivers and tuition tax credits to encourage entrepreneurs to start up new businesses in Iowa.

Branstad pointed to a 44^th place ranking for Iowa in entrepreneurial activity in a 2009 Kauffman Foundation index, saying “we can do better than that, I think.”

To that end, Branstad, a Boone Republican who is running to be governor again, proposed taking the state tax burden off startup entrepreneurs while their new enterprises are in their infancy.

The former governor from 1983 to 1999 who is making a bid for a fifth term in challenging Democratic Gov. Chet Culver in the Nov. 2 election said he would seek legislation allowing “true startup businesses” to function free of state income tax for their first three years of operation. He also would propose allowing them to function free of state sales taxes for their first three years or for their first $50,000 in taxable purchases.

“This action will allow start-up companies to re-invest these tax dollars in their dream,” according to Branstad’s “Let’s Work” plan. “Additionally, it will help energize the Iowa economy with new employment opportunities and equipment purchases that would not have occurred but for this new program.”

Qualifying companies would have to be new ventures “started from scratch” in Iowa, not spin-offs of existing businesses, he said.

“We’re primarily focusing on Iowans who want to stay here because, frankly, we don’t get a lot of people who move here from other states. That’s been our problem. But there are a lot of talented Iowans that leave because it’s not a very conducive place for entrepreneurs to start up businesses,” Branstad said. “I have seen what this entrepreneurial encouragement can do in terms of creating jobs.”

Along with the state tax waivers, Branstad proposed providing a tuition tax credit for businesses that want to hire students directly from community colleges. Under the proposal, Iowa employers who commit to hiring a student during his or her first year of classes at an Iowa community college and who commit to pay for all of the student’s tuition would receive a tax credit equal to 50 percent of the tuition payment.

The prospective employer would be allowed to place reasonable requirements upon the student’s performance at the community college and establish a minimum length of employment under the agreed-upon arrangement. Employers would not be allowed to use the payment in lieu of a salary.

Read the full story here.

Read more at Branstad for Governor