The hand wringing was hot and heavy last year over Minnesota's ability to hold and grow innovative companies. Wisconsin had passed an "angel tax credit" giving tax breaks to investors putting capital into fledgling companies. Minnesota, lawmakers argued, had to step up.
"I cringe when I see Minnesota innovators -- who love our state -- run for the border because they can't get the startup money they need to grow their businesses," St. Paul DFL Rep. Tim Mahoney, said in February 2010. Mahoney, then chair of the House Biosciences and Emerging Technologies Committee, helped get a similar angel credit signed into law here in April 2010.
Minnesota's credit has become incredibly popular with investors. But when it comes to ranking states by their tax burden on new investment, Minnesota was already doing pretty well.
In fact, the Council on State Taxation this year put Minnesota in the top 10 states in the country for tax structure friendly to capital investment.
The council, made up of more than 600 multistate corporations, hired consulting firm Ernst & Young to analyze state tax systems to see how they treated new investment in selected industries.
This particular analysis did not take into account tax credits or incentives created by states but looked instead at, "all major state and local business taxes associated with new capital investments including corporate income and franchise taxes, real and personal property taxes and sales taxes on business input purchases."
It also focused on the kind of investment states compete to attract -- headquarters, research & development, call centers and manufacturing plants.
Bottom line: Minnesota and Wisconsin are pretty close. And both states in this analysis are a little better than North and South Dakota, the low tax states Minnesota officials often worry about.