There are only two things certain in life: death and taxes. 223 years after Ben Franklin’s death, Matt Baxter (@mattwbaxter) seeks to ease the pain of one of those with the launch of StaxExchange, a digital marketplace for tax credit buyers and sellers.
In a nutshell: In support of economic development, many states offer various incentives to businesses (Hollywood not excluded) to do business there. Some of these incentives might be tax credits. These tax credits can be used to offset the company’s tax liability. If the company has limited or no tax liability, it can sell the tax credits to a company that does need them.
We checked in with Matt to learn more about how StaxExchange is changing the game:
The StaxExchange is creating an online marketplace for tax credits that allows financial advisors to easily buy and sell tax credits for their clients by developing a centralized platform with dynamic pricing.
We are also initially launching our marketplace for film tax credits, and Georgia has become one of the top 5 filming locations in the country, so it’s a good fit.
There are 5 people on our team.
I had thought of the idea awhile back. In August 2013, I decided to commit to creating the company.
Funded or bootstrapped:
Price of Services:
The pricing model of the StaxExchange is that tax credit sellers pay a fee (2-5%) based on the amount of credits they sell on the exchange.
What Customers Get:
We provide customers with a transparent and efficient method for buying and selling credits, so you can go to the marketplace and see exactly what tax credits are available and what the prices are, which will adjust based on supply and demand. Currently, this is not available to customers.
How’d You Get The Idea For It:
Having the idea for the StaxExchange really came from the different experiences I’ve had. My masters degree is in economics, where you think a lot about market design and efficiency. I was the tax and economic development policy advisor to a former Governor of Georgia, so I know tax credits really well. I’ve also worked in investment banking, so I have experience structuring and executing financial transactions. Once I saw that the market for these credits didn’t make sense and that there were customers who would pay if I improved it, I had my idea.
Check back in a few weeks for part 2 of the Q & A with StaxExchange.
[Photo Credit: Whitlock/Hypepotamus]