The Massachusetts Life Sciences Center has announced that it will begin accepting applications on July 18 for the 2011 Life Sciences Tax Incentive Program from companies engaged in life science research and development, commercialization and manufacturing in Massachusetts.  The Life Sciences Initiative, which authorizes the Center to award up to $25 million in tax incentives each year, is designed to expand life sciences-related employment opportunities, promote health-related innovations and stimulate research and development, manufacturing and commercialization in the life sciences. 

The deadline for applications to be submitted is October 7, 2011 by noon.  The Life Sciences Center is hosting information sessions throughout the state to provide more information and answer any questions from July to September.  The dates and locations of the sessions, along with additional information on the program, can be found at http://www.masslifesciences.com/taxincentive.html. 

Applicants are generally companies that have transitioned or are transitioning from pure life sciences research and development (“R&D”) to commercialization and manufacturing. The Center recognizes that many companies struggle to address the significant capital investment associated with the long life sciences R&D cycle and the high cost of translating research into a commercially viable product. This solicitation is designed to help sustain these companies through a critical stage of development and to leverage additional sources of capital to bring cutting edge innovation to the marketplace.

Some of the incentives available through the program include:

• 10% Life Science Investment Tax Credit (90% refundable)
• 100% FDA User Fees Credit (90% refundable)
• Extension of NOL carryforwards from 5 years to 15 years
• Refundable Research Credit
• Elimination of throwback provision for Massachusetts apportionment purposes
• Deduction for Orphan Drug Testing Expenses
• Sales tax exemption for property used in development of facilities

Additionally, effective for tax years beginning on or after January 1, 2011, a taxpayer, to the extent authorized by the life sciences tax incentive program established, may be allowed a refundable jobs credit against corporate income tax liabilities in an amount determined by the Massachusetts Life Sciences Center in consultation with the department. The taxpayer must commit to the creation of a minimum of 50 net new permanent full-time positions in the state. If the credit claimed exceeds the taxpayer's liability, 90% of the excess credit will be refundable to the taxpayer.

Interested applicants will be required to submit an on-line application.  Applications will be accepted on an ongoing basis via the Massachusetts Life Sciences Center website (www.masslifesciences.com) starting July 18, 2011 until the deadline of October 7, 2011 at noon. This is a one-step application process that includes information necessary for company certification under the Life Sciences Act. Please see Sections 5 and 6 of the solicitation for more information regarding the application process. 

In 2010, the Center awarded $23.9 million in tax incentives to 30 companies. These companies agreed to create nearly 1,000 new jobs during calendar year 2011.  With the assistance of CBIZ Tofias, our clients were awarded a total of $2.54 million in tax incentives in 2010, accounting for more than 10 percent of the $23.9 million awarded.  In addition, 100 new jobs were agreed to be created in the state as a direct result of the tax incentives awarded to our life sciences clients.

CBIZ Tofias is available to assist other life science companies in the 2011 application process, or with other tax matters affecting life science companies.  If you have any questions or need assistance, you may contact either:

Michael Corrente
Managing Director in Charge of the CBIZ Tofias Life Sciences Practice
888.761.8835 Ext. 3242
MCorrente@cbiztofias.com 

Mark Kebadjian
Tax Managing Director, member of the CBIZ Tofias Life Sciences Practice
888.761.8835 Ext. 3762
MKebadjian@cbiztofias.com  

Copyright © 2011 CBIZ Tofias.  All rights reserved.  Contents of this publication may not be reproduced without the express written consent of CBIZ Tofias.  To ensure compliance with requirements imposed by the IRS, we inform you that-unless specifically indicated otherwise-any tax advice in this communication is not written with the intent that it be used, and in fact it cannot be used, to avoid penalties under the Internal Revenue Code, or to promote, market, or recommend to another person any tax related matter.  This publication is distributed with the understanding that CBIZ Tofias is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ Tofias assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.