$1 Billion Tax Credit To Support Biomedical Research By Small Firms

GRAND RAPIDS – Small biotechnology firms will be gaining new support in the state of Michigan. A New Therapeutic Discovery tax credit, created under the Affordable Care Act, will support research with potential to produce new therapies, create high-quality jobs for the state.

The biotechnology industry employs 1.3 million Michigan workers, and the industry continues to be a key growth engine for our economy. The tax credit, which will be effective immediately for the awarded firms, covers up to 50 percent of the cost of qualifying biomedical research investments made in 2009 and 2010.

The 50 percent tax credit is capped at a maximum of $5 million per firm and $1 billion overall. The credit will be allocated among projects that show significant potential to produce new and cost-saving therapies, support good jobs, and increase U.S. competitiveness.

Only smaller firms with 250 workers or fewer were eligible to apply for the credit. Because biomedical research can take many years to turn a profit, newer firms may be unable to take advantage of this tax credit that offsets income tax liability. To ensure that these firms can benefit, awarded firms will have the option to take the credit as a grant instead of a tax credit.

The credit will be a tax benefit targeted to therapeutic discovery projects that show a reasonable potential to:

Result in new therapies to treat areas of unmet medical need or prevent, detect or treat chronic or acute diseases and conditions;

Reduce the long-term growth of health care costs in the United States, or;

Significantly advance the goal of curing cancer within 30 years.

As part of the review process for research projects, the Department of Health and Human Services (HHS) is evaluating each project to ensure that they have a reasonable potential to meet one or more of these goals. In addition to supporting biomedical research to find life-saving treatments, the credit?s allocation is considering which projects show the greatest potential to create and sustain high-quality, high-paying jobs in the United States, and to advance our competitiveness in the fields of life, biological, and medical sciences.

The application process has closed, but recipients of the tax credit will be notified in October.

For more information, MISBTDC.Org

a>>