Approx $7 Million Available Thru Maine Seed Capital Tax Credit Program

The Maine Seed Capital Tax Credit Program has $7 million in tax credit authority available for use by investors and Maine businesses for the remainder of calendar year 2020.

“Many Maine businesses have grown and thrived through this program,” stated Bruce Wagner, FAME CEO. “Thousands of Maine jobs have been created and retained in part due to the Seed Capital Tax Credit, and it has spurred millions in investments in Maine businesses over the years. We encourage interested investors and businesses to consider utilizing the remaining credit availability before it expires on December 31.”

Last winter, the Maine Legislature and Governor Mills approved via Public Law 2020, Chapter 616 (the Supplemental Budget), increased funding for the program, increasing the annual program limits from $5 million per year to $15 million per year. The legislation also made other changes to the program that are designed to make funding available to more Maine companies.

The Maine Seed Capital Tax Credit Program, administered by FAME in conjunction with Maine Revenue Services, is designed to encourage equity and near-equity investments in eligible Maine businesses, directly and through private venture capital funds. FAME may authorize state income tax credits or refundable tax credits to investors for 40 percent of the cash equity they provide to eligible Maine businesses. Investments may be used for fixed assets, research or working capital. The program reduces the risk of a Maine investment, encouraging investors to commit capital to Maine companies that might otherwise be invested outside the state.

FAME now has the authority to issue prior to the end of the year up to $7 million in available remaining tax credits under the program for eligible investments made in eligible companies on or after April 1, 2020. Investments made prior to April 1, 2020 are not eligible, and credits already issued in 2020 for investments made on or about January 2, 2020 will not be adjusted. The new legislation made additional program changes, effective April 1, 2020:

  1. Credits are now authorized at 40% (down from 50%) of eligible investment;
  2. The maximum cumulative qualified investment in each company has been reduced to $3.5 million dollars (down from $5 million).
  3. There is now a limit of qualified investment in any one company in any one year of $2 million dollars.

“The Seed Capital Tax Credit Program has been an effective and useful option for many Maine businesses and their investors as they consider financing options to scale-up and grow,” stated Heather Johnson, Commissioner of the Maine Department of Economic and Community Development and a FAME board member. “Expanding the annual program limits to $15 million was a key recommendation of the state’s ten-year Economic Development Strategy in order to promote innovation.”

For more information about the program, please contact FAME at (207) 623-3263 or visit https://www.famemaine.com/business/programs/equity-capital/maine-seed-capital-tax-credit-program/

The Finance Authority of Maine (FAME) is a quasi-independent state agency that provides innovative financial solutions to help Maine citizens pursue business and educational opportunities. FAME helps to lead the creation of good paying jobs for Maine citizens by working at the nexus between economic and workforce development. To learn more about FAME, please visit www.famemaine.com.