(INDIANAPOLIS) – Indiana’s been trying to sell itself as the Silicon Prairie. It’s betting on a revised tax break to attract the venture capital needed to accomplish that.

Since 2002, Indiana has offered a tax credit for venture capital, but you can only use it if you owe taxes in Indiana. Starting next year, the credit will be transferable — you can sell it to someone who can use it directly. Legislative analyst’s estimate it’ll generate another 11-to-13-million dollars a year in startup money. Indiana Economic Development Corporation C-O-O Chris Cotterill says he expects the effect to be higher than that.

20 other states already have transferable credits. Cotterill predicts the effect will be “transformational” — he says for companies trying to get a first foothold, even a half-million dollars represents critical support.

Indiana Chamber president Kevin Brinegar says it’s an overdue and important change, though he says he’d still like to see a larger credit. Some states award as much as 50-percent — Indiana’s credit is 20-percent.

The Chamber also wants to see the state increase the 12-and-a-half-million-dollar cap on how much the state can spend on the tax credit per year. That cap translates to 62-and-a-half-million in investment. Cotterill predicts making the credit transferable will soon have the state bumping up against the cap and says the administration may ask legislators to raise it.

Photo by Pepi Stojanovski on Unsplash