VA Biotech Companies Urged to Sign Up for Tax Credits

Another great article by Vandana Sinha.

Virginia biotechs urged to register for tax credits
Washington Business Journal - by Vandana Sinha Staff Reporter

Virginia bioscience leaders are urging companies to register to be eligible for new state investor tax credits targeting their industry for the first time.

Virginia lawmakers narrowed a $3 million pot of tax breaks for angel investors down to those investing in only bioscience and advanced technology companies. The money will be available this calendar year to companies that register by the end of December.

“It was so broad before that in many cases you could be investing in a restaurant and get a tax credit,” said Mark Herzog of the Virginia Biotechnology Association.

With the newly revised tax credits, which both the companies and investors must apply for each year, Virginia joins Maryland by focusing such incentives on an industry where early-stage investments are too crucial to do without, but too risky to attract much attention from established funds. In Maryland, the state allotment is $6 million.

In the Virginia fund, half is reserved for biotech and tech spinoffs from universities. Herzog said all qualified companies would split the available funds equally, unlike the first-come-first-served system in Maryland.

“Going forward, as we reach out to a broader group of investors, that’s something that will be attractive,” said Ross Dunlap, chief operating officer of Ceres Nanosciences LLLP, a Manassas-based George Mason University spinoff that has raised $1.5 million from mostly friends and family in the last year.

The Virginia bill also provides for up to $100,000 in matching federal Small Business Innovation Research grants, though not for firms that work with embryonic stem cells.