The city of Atlanta is now giving tax breaks for tech startups of up to $1 million after the City Council approved the amendment last week.
The ordinance is designed to help startups get up and running, said Eloisa Klementich, managing director of business development at Invest Atlanta, the city’s economic development agency. For instance, they don’t won’t have to pay a business license fee or a $50 zoning fee.
“It may not be monumental in terms of a huge number, the reality is ‘If I’m a startup with no revenue,’ everything matters,” Klementich said.
The tax break is for up to $1 million or for a company’s first three years – whichever comes first, she said. To qualify, the business must be in certain fields related to high technology, life sciences, information technology and intellectual property as defined under the North American Industry Classification System.
The program is modeled after other cities such as Austin, Texas, Philadelphia, Pennsylvania, and the District of Columbia.
“It’s sort of a nationwide competition to attract this type of business and retain it,” Matthew Barcaskey, visiting assistant professor of finance at the Georgia Institute of Technology, said.
Atlanta needs this type of ordinance to keep up, he said.
Two years ago, Janelle Jolley founded Sidewalk District, an online marketplace for local retailers. She said the tax incentives are helpful, but that it wasn’t at the top of her concerns.
“In reality, your first year or even two years in business, you’re going to be losing money anyway, and you’re able to write off a whole host of things,” Jolley said.
She said she’s more concerned about the amount of capital available for startups.