Maryland’s Biotechnology Investment Tax Credit program provides income tax credits for investors in qualified Maryland biotechnology companies.  This tax credit program was passed to offer incentives for investment in seed and early stage, privately held biotech companies.  The bill was passed in 2005 and is funded for fiscal year 2009.

The value of the credit is equal to 50% of an eligible investment made in a qualified Maryland biotechnology company during the taxable year.  The maximum amount of the credit cannot exceed $250,000 for investors.

The total amount of initial credit certificates issued in each fiscal year cannot exceed the amount appropriated to the reserve fund in the state budget.  All applications will be reviewed and approved on a first come, first served basis.

Read the complete statute controlling the operation of the program by downloading a PDF version (free Adobe Acrobat reader required).

Qualifying for the Credit

The Investor must complete and mail the Maryland Biotechnology Investment Incentive Application Forms to the Maryland Department of Business and Economic Development (DBED).

The completed application will include an investor form (Form A1, A2 or A3) and the Maryland Biotechnology Company Form (Form B). Complete forms will include all information requested.

Investor Forms:

• Form A1 – Qualified Investor, Individual
• Form A2 – Qualified Investor, Corporation (all kinds including Sub-Chapter S)
• Form A3 – Non Sub-Chapter S Corporation Pass-Through Entities

Qualified Maryland Biotechnology Company Form:

• Form B - Qualified Maryland Biotechnology Company

Note : This is a change. Multiple attachments 9 – Form B do not have to be completed for investors in a prospective QMBC if current Form B attachments 9 are on file with DBED and are 30 days old or less.

Qualifications

• A Qualified Investor is an individual or any entity who invests at least $25,000 in a Qualified Maryland Biotechnology Company.
• A Qualified Maryland Biotechnology Company is a company that (1)has its headquarters and base of operations in the State of Maryland; (2) has fewer than 50 employees; (3) has been in active business no longer than 10 years (12 years if approved by DBED); and (4) has been certified as a biotechnology company by DBED.

Certification Process

All applications are reviewed and approved based on the order in which they were received. 

At least 30 calendar days but no more than 60 calendar days prior to making a qualifying investment, the investor must submit a completed application to DBED.  Within 30 calendar days of receiving the application, DBED will issue an initial credit certificate certifying the amount of any approved tax credits to a Qualified Investor or offer rejection.  After DBED has issued an initial tax credit certificate the investor has 30 days to make an investment in a Qualified Maryland Biotechnology Company.  Within 10 days of making an investment in a Qualified Maryland Biotechnology Company the investor shall provide written notice with supporting documentation to DBED.   If the investor fails to provide notice of investment to DBED within 30 days after the issuance of the initial tax credit certificate DBED shall rescind the certificate.  Based on the actual amount of an investment made by the investor DBED shall issue a final tax credit certificate to the investor.

A qualified investor may redeem a final tax credit certificate for a taxable year beginning after December 31, 2008.

Only mailed applications will be accepted.  Electronic or faxed applications will not be accepted.  Incomplete applications will be rejected. Applications will not be accepted prior to 9:00 a.m. on July 1, 2008.

Forms are available for download in Microsoft Word format.

Individual Investors: Download Form A1 and Form B
Corporate Investor: Download Form A2 and Form B
Pass-Through Entities: Download Form A3 and Form B

Please mail completed applications to:

Attn: Maryland Biotechnology Investment Incentive Tax Credit
C/O The Maryland Venture Fund
Maryland Department of Business and Economic Development
217 East Redwood Street, Floor 22
Baltimore, Maryland 21202

Use of courier service encouraged.

* Applicants should be aware that all information submitted in or accompanying an application may be subject to the provisions of the Maryland Public Information Act (Md. Code, State Government Article, Title 10, Subtitle 6, Part III) and to the provisions of Md. Code, Tax General Article, §10-725(h).