A Maryland biotech tradition comes to an end
This is a little esoteric for most people outside the biotech community in Maryland, so I'll try to explain it as simply as possible, in plain English.
Maryland has this really sexy tax credit program where investors can get 50 percent of their investment in an early-stage biotech company back in the form of a tax refund. That means, for instance, an investor can buy a $100,000 stake in a startup for $50,000. You give the startup $100,000 and the state gives you back $50,000.
As you can imagine, this state program is VERY popular among biotech startups and investors, and it's helped pump roughly $50 million worth of investment into the state biotech industry. But here's the funny thing about it: the state legislature made this tax credit available on a first-come, first-serve basis. The money is limited, too: $6 million this past year was given out, while next year it's been upped to $8 million.
So for the past four years, this has meant that company executives had to line up outside an office to reserve the tax credit for themselves. It got so bad last year that executives starting lining up FIVE days before the program opened July 1st.
Executives were sleeping on the floor of a conference room at the University of Maryland BioPark to reserve their space in line. It was NUTS. Watch the video.
So this year, the Maryland Department of Business and Economic Development, which administers the tax incentive program, is doing away with the in-person wait and implementing an electronic application process, I learned today.
From a press release sent over from DBED's Karen Glenn Hood:
Investors and companies planning to apply for the credit on July 1 must submit supporting documentation and investor forms between June 1 and June 25 to the Maryland Biotechnology Center’s offices at the World Trade Center in Baltimore (401 E. Pratt Street, 7th floor). Investors will be given a User Name and Reference Number for their electronic submission beginning 9 a.m. July 1. The order of applications will be determined solely by electronic submission and will be taken in order according to the time submitted. For details, visit www.marylandbiocenter.org
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