Economic development—using public funds to incentivize private economic investments—is a core government function practiced by both parties and at all levels of government.
Numerous public and public-private partnerships in Alabama are tasked with some form of economic development, including the Alabama Innovation Commission. One of the Commission’s goals is to build up Alabama’s technology sector, including start-ups.
One strategy sometimes used to support such a goal is investor tax credits, including angel investing credits. Twenty-five states currently provide some form of investor incentive tax credit programs, a number of which offer refundable credits to out-of-state investors with no in-state tax liability.
Alabama has no such incentive program that directly benefits out-of-state investors.
New PARCA research asks if investor tax credits are an efficient way for Alabama to enhance its technology sector.
