M
aryland’s life sciences ecosystem has become a key hub along the eastern shore of the United States due to its position in infectious disease research and vaccine development and manufacturing. While the state saw an infusion of billions of dollars in government financing in the development of vaccines, Maryland’s Biotechnology Investment Incentive Tax Credit, is a tool that has been used to attract venture capital funding in the state.
The tax credit was established in 2005 to incentivize venture capital investment into the state of Maryland. Since 2016, the most recent year for full data, the state has offered more than $70 million in tax credits to 114 different entities. That, in turn, has generated about $140 million in investments into the state’s life sciences ecosystem, the Baltimore Business Journal reported.
The tax credit is an incentive for investors from across the globe to provide financing for companies within Maryland. The Biotechnology Investment Incentive Tax Credit (BIITC) provides the investor with a refundable state income tax credit for a seed or early-stage investment in a qualified company.
Specifically, investors are qualified for an income tax credit equal to 33% of an eligible investment up to $250,000 for a qualified company. However, for companies located within Allegany, Dorchester, Garrett or Somerset, the amount climbs to 50% for an investment up to $500,000. That means a $100,000 investment from a venture capitalist into a company in these 50% counties will see a guaranteed return of $50,000 from Maryland.