Possible Qualifying Therapeutic Discovery Project (QTDP) Grant Renewal

The Qualifying Therapeutic Discovery Project provides $1 billion in Federal tax credits or grants to biotech firms. The grant was initially a one-time grant that was introduced last year to encourage research and development in biotech firms. Nearly 3,000 firms received an award but there was wide spread disappointment in the manner the grants were distributed and how much each firm was awarded.

Recently, Congresswomen Susan Davis, D-Calif., and Allyson Schwartz, D-Pa., introduced a bill that would renew the $1 billion annual grant until 2017. According to BIO CEO Jim Greenwood, the renewal of the grant will provide needed financial support to biotech firms that are working on breakthrough therapies and cures that could eventually lower the cost of health care over the next 30 years.

By: Tosin Hassan

Biotechnology Business Tax Credits for Maryland!

Last month, H.B. 587 entitled “Biotechnology Investment Tax Credit – Qualified Maryland Biotechnology Company” became law.  This provides income tax credits for fiscal year 2012 and 2013 equal to 50% of an eligible investment for investors in qualified Maryland biotechnology companies.  This tax credit program offers incentives for investment in seed and early stage biotech companies, up to $250,000.  Investments in companies that have been in active business for up to 15 years qualify for the credit.

When can I submit an application for certification?

Applications can be submitted beginning JUNE 1, 2011 and are reviewed and approved on a first come basis.  It should also be noted that total credit certificates issued in a fiscal year cannot exceed budget amount, so the sooner you can file your completed application the better!

Contact us today to assist you in preparation of the full application.

For more information, visit Maryland’s Department of Business & Economic Development website at:

http://www.choosemaryland.org/businessresources/pages/biotechnologyinvestmenttaxcredit.aspx

Revenue Recognition is changing for Tech Companies and Others with Multiple Deliverables

Submitted by Don Gutman

One of the constant accounting challenges companies face is the development of an appropriate revenue recognition model for the broad array of products and services they sell to customers.  We have seen many examples of public companies restating financial statements as a result of using inappropriate revenue recognition methods.  A classic example of this issue can be found in the cell phone industry where it is common for the seller to provide a free phone, a multiple-year service contract and other services all in one contract with the customer.   The customer in turn may pay a one-time activation fee, a highly discounted fee for the phone and a separate monthly fee for the basic service.   In this fairly basic example, products have been delivered, cash flows have started and a reasonable expectation of future payments exists. Continue reading »

Virginia Tax Break Supports Tech Start-ups

In April 2010 Virginia enacted legislation that may significantly help hi-tech and biotech start-ups raise capital in Virginia.  SB 428 (Virginia Innovation Investment Act) Grants an income tax deduction for any income taxed as a long-term capital gain for federal income tax purposes or any income taxed as investment services partnership interest income, on or after January 1, 2011, that is related to a qualified investment in a technology and science start-up business having a principal office or facility in the Commonwealth and less than $3 million in annual revenues in the fiscal year prior to the investment.  The deduction would relate to investments made between July 1, 2010, and June 30, 2013. 

Read more- Tech Start-up tax help