Maryland Biotech Tax Credit Spared

by Mike Godfrey, Tax-News.com, Washington

17 April 2009

After pressure for budget cuts and some wrangling, the State of Maryland has approved the continuation of its popular USD6m tax credit fund to promote new biotechnology businesses.

Owners of Maryland biotech companies, led by the Tech Council of Maryland, successfully lobbied for full funding of the state's biotechnology investment tax credit after the House had earlier voted to cut the fund by USD2m. The Senate approved the full funding, and a compromise by a House-Senate conference committee included USD6m for the biotech tax credits.

The program is intended to stimulate investment in Maryland biotechnology start-ups by providing a tax credit of 50% of the money people invest in eligible companies. It has provided USD6m a year since 2006 for these tax credits and is a model for other states wishing to foster entrepreneurial investment. To be eligible for the credit, companies must be headquartered in Maryland, have fewer than 50 employees and have been in business for less than 12 years. The credit cannot exceed USD50,000 for individual investors and USD250,000 for corporations and venture capital firms. Companies are accepted on a first-come, first-served basis when the fiscal year begins July 1. Recently the fund has been so popular that it has been fully subscribed within 24 hours of the release date.

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