Boosting Biotech: New York City Revives Tax Credits for Emerging Companies

December 4, 2023 – New York City Mayor Eric Adams signed legislation reinstating tax credits for New York City companies in the life sciences and biotech space. As outlined in the ‘New’ New York Plan, “Making New York Work for Everyone,” bolstering the life sciences and biotech sector is a key component of increasing employment in the city. The biotech industry currently employs 20,000 New Yorkers, but the NYC Economics Development Corporation hopes to double this number in the next 10 to 15 years.

Between January 1, 2023, and January 1, 2026, emerging companies can apply for up to $250,000 in Credit against certain New York City taxes, with a total annual cap of $3 million. Eligible companies who owe less than $250,000 in taxes can receive the excess credit amount in the form of a refund. Qualifying expenses include property purchases, research, employee training, and costs associated with relocating from an academic business incubator to another location within the city. Specific percentages and limits apply to each category of expenses.  

Eligibility

To qualify for the Biotechnology Tax Credit, a company must satisfy each of the following six criteria:

1. Engage in biotechnology.

2. Meet one or both of the following requirements:

   1. The company must have a ratio of research and development funds to net sales that is equal to or exceeds the average ratio of all companies surveyed by the National Science Foundation.

   2. The primary products or services of such company must be classified as emerging technologies.

3. Employ 100 or fewer full-time employees, with at least 75% based in New York City.

4. Have a research and development to net sales ratio of at least 6%.

5. Have annual product sales not exceeding $10 million.

6. Have gross revenues (including the gross revenues of affiliates and related members) of no more than $20 million in the preceding year.

For more information, see here.