Tuesday, March 24, 2009

$6M Maryland Biotech Tax Credit Faces the Ax, as State Lawmakers Plug Budget Shortfalls

From BioRegion News

The state's $6 million biotechnology tax credit may be cut or eliminated entirely by legislators seeking ways to further trim the budget, a Tech Council of Maryland official told Maryland Community Newspapers
Richard Zakour, executive director of the TCM's MdBio division, has circulated a letter to biotech executives and others urging them to contact legislators to request that the program not be cut: "This is an invaluable incentive for Maryland's biotech business community and provides access to capital at a time when Maryland needs to be encouraging our most innovative companies," Zakour wrote.

Zakour and other biotech executives sought earlier this year to double the tax credit to $12 million, as Gov. Martin O'Malley originally said he would do, before the economic upheaval that has reduced state revenues.

Concern over a cut to the biotech tax credit was heightened earlier this month when the state Board of Revenue Estimates adopted revised estimates projecting that state revenues will fall $445.5 million short of forecasts this fiscal year, and $716.5 million short in fiscal 2010, which begins July 1.

The first-come, first-served program allows investors in Maryland biotechnology companies to take a 50 percent credit against state income taxes. The company must be headquartered in Maryland, have fewer than 50 employees, and have been in business less than 12 years.

On the first day applications were taken last July, some biotech executives camped out in front of the doors to the Maryland Department of Business and Economic Development, to make sure they would obtain their share of the credits — which ran out on that first day, with $8.5 million worth requested by local biotechs in applications, officials said.

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