The Innovation Fund Tax Credit was created to stimulate venture capital investment in innovative Iowa businesses. Individual investors receive tax credits equal to 25 percent of an equity investment in a certified Innovation Fund. In turn, those certified Innovation Funds make investments in promising early-stage companies that have a principal place of business in Iowa.
Innovative businesses include, but are not limited to, businesses engaged in advanced manufacturing, biosciences and information technology.
- Total amount available for investment in Innovation Funds is $8 million this fiscal year
- Investors must invest in the form of cash to purchase equity or near-equity in an Innovation Fund
- Investors issued an Innovation Fund tax credit certificate may transfer the tax credit certificate once
- Fund must be certified by the Iowa Economic Development Authority (IEDA) Board before investments made in the fund can be eligible to receive a tax credit
- Investors seeking tax benefits must invest in a certified Innovation Fund
- Only investments made in a certified Innovation Fund will be eligible for the tax credit
- Fund proposes to provide multiple rounds of funding and early-stage private sector funding to innovative businesses with a high growth potential, and proposes to focus such funding on innovative businesses that show potential to produce commercially viable products or services within a reasonable period of time
- Fund proposes to evaluate all prospective innovative businesses using a rigorous approach and proposes to collaborate and coordinate with the authority and other state and local entities in an effort to achieve policy consistency
- Fund proposes to collaborate with the Regents institutions of Iowa and to leverage relationships with such institutions in order to potentially commercialize research developed at those institutions
- Fund proposes to obtain at least $15 million in binding investment commitments and to invest a minimum of $15 million in companies that have a principal place of business in Iowa
Review the full Administrative Rules
Eligibility
Individual investors receive tax credits equal to 25 percent of an equity investment in a certified Innovation Fund. In turn, those certified Innovation Funds make investments in promising early-stage companies that have a principal place of business in Iowa.
Innovative businesses include but are not limited to: businesses engaged in advanced manufacturing, biosciences, and information technology.
Application Process
- Applications for certification are reviewed by the IEDA Board with certification granted after the fund demonstrates it can meet all the eligibility requirements
- Tax credits are available on a first-come, first-served basis
- Investors must submit an application by March 31 of the year following the calendar year in which the equity investment was made to receive a tax credit certificate
- The application is available at govconnectiowa.gov
- "Create a Logon" to see the options to apply for a tax credit