Massachusetts Billion Dollar Life Sciences Legislation Includes Tax Credits For “Certified” Life Science Companies

Massachusetts Governor Deval Patrick recently signed the

Massachusetts Life Sciences Initiative, legislation that will

provide $1 billion over the next ten years to support the

development of the life sciences industry in Massachusetts. In

addition to providing greatly increased funding for state capital

expenditures, the June 16 legislation also provides for grant

programs as well as new tax credits and incentives for businesses.

In fact half of the state's billion dollar fund will be spent

in the form of direct or indirect financial assistance to corporate

ventures.

$250 million will be awarded over 10 years in tax incentives,

evenly allocated at a rate of $25M per year, to "certified

life science companies" that undertake projects that meet the

goals of the initiative. Another $250 million will be awarded,

again over ten years, as scientific research grants and small

business assistance.

What Is A Certified Life Science Company?

Implementing regulations have not yet been written by the newly

created Massachusetts Life Sciences Center but the act itself

broadly defines "Life Sciences" to include:

agricultural biotechnology, biogenerics, bioinformatics,

biomedical engineering, biopharmaceuticals, biotechnology, chemical

synthesis, chemistry technology, diagnostics, genomics, image

analysis, marine biology, marine technology, medical devices,

nanotechnology, natural product pharmaceuticals, proteomics,

regenerative medicine, RNA interference, stem cell research and

veterinary science.

The Application Process

It appears likely that applicants will have to detail at least

one life science project the company plans to carry out in

Massachusetts and estimate (1) the projected new state revenue the

company expects to generate through the proposed project; (2) the

number of permanent full-time employees to be hired or retained;

(3) the projected taxable income generated by the employees

? as well as explain how the proposed project will

advance life sciences. Eligible companies will be granted

certification for renewable five year periods subject to annual

reporting requirements.

What Type Of Tax Incentives Will Be Available?

Again, implementing regulations have not yet been promulgated

but the legislation itself details several of the contemplated tax

incentives, including:

Investment Tax Credits for 10 percent of the cost of qualifying

property (which includes buildings and structural components as

well as tangible personal property) used...