Mintz Levin’s Tax Credits Guide

Public Resources for Massachusetts Entrepreneurs



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Massachusetts Life Sciences Center: Tax Incentive Program

Application Deadline: Not being accepted at this time but to be updated

Funding Opportunity:  The Life Sciences Tax Incentive Program is a set of ten different tax incentives which address the significant expenditures associated with the life sciences R&D cycle and the high costs of translating research into commercially viable products. Several of these tax incentives are refundable, enabling an awardee to receive cash from the Commonwealth, even if no income tax is paid. The incentives offered under this solicitation may only be claimed after July 1, 2018 (including, without limitation, the calculation of estimated taxes). The Program consists of the following incentives:

  • Life sciences investment tax credit (pursuant to 62 MGL 6(m) and 63 MGL 38U).
  • FDA user fees credit (pursuant to 62 MGL 6(n) and 63 MGL 31M).
  • Extension of net operating losses from 5 to 15 years (pursuant to 63 MGL 30, section 17).
  • Elimination of throwback provision in calculation of sales tax (pursuant to 63 MGL 38(f), section 6).
  • 90% refund of already-available excess §38M research credits (pursuant to 63 MGL 38M(j)).
  • §38W life sciences research credit (pursuant to 63 MGL 38W).
  • Deduction for qualified orphan drug expenses (pursuant to 63 MGL 38V).
  • Designation as an R&D company for sales tax purposes (pursuant to 63 MGL 42B, section 3).
  • Sales tax exemption for certain property (pursuant to 64H MGL 6(xx)).
  • Life sciences jobs incentive refundable credit (pursuant to Chapter 68 of the Acts of 2011, outside sections 63, 65, 70, and 211).

Requirements: 

  • Applicant companies must be registered to do business in Massachusetts.
  • Applicant companies must employ at least 10 permanent FTEs (35 hours/week) as of December 31, 2017
  • Applicant companies must commit to hiring at least 10 net new jobs in calendar year 2018 and be able to retain those jobs through 2022.
  • Applicant companies must file a Massachusetts tax return for either calendar year ending December 31, 2017 or a fiscal tax year ending after December 31, 2017 and prior to October 31, 2018.

Industry Specific: Life sciences companies.


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MA Research & Development Tax Credit 

Application Deadline: Open application.

Funding Opportunity: This tax incentive was designed to remove any obstacles to research and development investment and spur growth and innovation. It is divided into two categories: (1) A ten-percent credit designed for Qualified Expenses which are defined as any research expense incurred which would qualify for the Federal R&D tax credit; (2) A fifteen-percent credit available to Basic Research Payments for any costs related to donations and contributions made to research organizations such as hospitals and universities. The R&D tax credit can be taken in conjunction with the state's Investment Tax Credit of three-percent (or five-percent as part of the Economic Development Incentive Program). The R&D tax credit may reduce the corporation's tax to the minimum tax of $456.

Requirements:

  • Research & Development must be conducted in MA.
  • Companies must be foreign or domestic corporations subject to the corporate excise under Chapter 63 of the MA General Laws.

Industry Specific: No.