As in little tax stimulus packages, little upgrades to the corporate laws of the state. Some Massachusetts life science companies say the new laws were just what they needed to be able to stay in the state.
In Massachusetts, the Commonwealth's legislature recently "cleaned up" some of the older corporate laws that were a tad out-of-date ( such as creating M.G.L. Ch. 156D) and they also put in place a couple of tax incentives that were helpful. One was to broaden the class of companies who could take advantage of a sales tax exemption for "R&D companies," under which those companies do not pay sales tax on the materials, machinery, fuel and tools they buy for their research activities. This tax exemption had been in place for a while, but the legislature changed the definition of an "R&D company" to also include companies for whom at least 2/3 of their expenditures in a year are for research activities (before the change, only companies that derived 2/3 of their taxable receipts in a year from R&D were included).
The other incentive was a job incentive payment for biotechnology jobs. Under this plan, a company who creates at least 10 full-time biotechnology jobs in a year gets a payment from the Department of Revenue equal to 50% of the salary increase in biotechnology jobs (with certain services qualifying) for that company multiplied by the MA personal income tax rate. So if a company adds on $1MM in salaries in qualifying biotechnology jobs in a year, that company would receive a payment of $1MM x 50% x 5.3% (the MA tax rate) = $26,500, paid out in three equal payments over three years. Heck - it's still some cash back.
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