New York City Gains $3 Million Tax Credit for Biotech Firms

The New York State legislature passed an act enabling New York City to move forward with a $3 million biotech tax credit that is expected to encourage biotechnology firms to bring their jobs, innovation, and emerging technologies to the city. The bill (S.4845-B/A.8131) is expected to be signed into law by Gov. David Paterson.

Among the first beneficiaries of the credit will be new tenants for the East River Science Park (ESRP), a $700 million bioscience complex being built along First Avenue between 28th and 30th Streets. Last week, ESRP announced its first signed tenant, biotechnology company ImClone Systems, which is owned by Eli Lilly. The city's new biotech tax credit, in tandem with state tax incentives and broad-based government investment in diversifying the local economy, will bring more such companies to ESRP and sites across the five boroughs.

The new tax credit, designed to work with New York State's Qualified Emerging Technologies Credit (QETC), will be capped at $3 million per year and will go into effect for three years beginning January 2010. The credit will help emerging firms equip labs, train technicians, and fund access to high-tech equipment. Funding will be focused mostly on growing firms, with the maximum amount of $250,000 per year given to eligible firms that increase their employment by at least 5 percent as compared to a base year. Growth below that threshold means firms would be eligible for half of the total credit amount. If credits in a given year exceed the cap, they will be allocated on a prorated basis by the New York City Department of Finance.

Proponents for the legislation point out the tax credit also will benefit the legal, accounting and marketing firms whose expertise is needed to bring a discovery out of the laboratory and into the marketplace.