An individual or business may be allowed a tax credit of up to 50% of an eligible investment in a qualified Maryland biotechnology company (QMBC), up to $250,000. The investor, after making the proposed investment, cannot own or control more than 25% of the biotechnology company.

1. Biotech Investment Incentive Tax Credit
An individual or business may be allowed a tax credit of up to 50% of an eligible investment
in a qualified Maryland biotechnology company (QMBC), up to $250,000. The investor, after
making the proposed investment, cannot own or control more than 25% of the
biotechnology company.
The credit may be taken against corporate income tax or personal income tax.
Sole proprietorships, corporations and pass-through entities, such as partnerships,
subchapter S corporations, limited liability companies and business trusts, may claim the
tax credit.
To qualify for the credit:
Qualified investors must contribute at least $25,000 in cash or cash-equivalent to a QMBC
that is certified by the Maryland Department of Business and Economic Development
(DBED).
A QMBC must:
Have its headquarters and base of operations in Maryland;
Have fewer than 50 full-time employees
Have been in active business for no longer than 10 years from the date it received its
first qualified investment; and
Not have any securities publicly traded companion any exchange.
A QMBC may include a company that has been an active business for up to 12 years, with
DBED approval.
Qualified investors are also required to file an income tax return. Credits may be claimed for
no more than $250,000 per investment in a qualified biotechnology company. DBED may
not certify tax credits for investments in a single qualified biotechnology company that are
in the aggregate more than 15% of the total amount appropriated to the Maryland
Biotechnology Investment Tax Credit Reserve Fund for that fiscal year. DBED may not issue
initial credit certificates in excess of the amount appropriated to the Reserve Fund for that
fiscal year in the state budget as approved by the General Assembly.
At least 30 days before making an investment, the business must submit an initial credit
certificate application to DBED. Upon approval (within 30 days of DBED’s receipt of the
application), the applicant will receive an initial credit certificate stating the amount of the
tax credit and will have 30 days to make the investment. Within the following 10 days, the
investor must notify DBED that the investment has been made. A final credit certificate will
be issued to the applicant stating the amount of the tax credit to which the applicant is
entitled. A copy of the final credit certificate must be filed with the taxpayer’s income tax
return.

2. How the credit is calculated:
The credit allowed is 50% of an eligible investment contributed during the tax year, not to
exceed $250,000. The amount in excess of the state tax liability may be refunded. The total
amount of final tax credit certificates issued by DBED each year is limited to the amount
appropriated to the Reserve Fund in the State budget. Applications are reviewed and
approved on a first come, first served basis.
Documentation required:
For taxable years beginning after December 31, 2012, this credit is available only with an
electronically-filed return. A copy of the certification issued by DBED must be included with
the electronic return, and the. Form 500CR section of the return must be completed.
Contact:
Maryland Department of Business and Economic Development
Office of Finance Programs, Tax Incentives Group
401 E. Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-4980
E-mail: taxincentives@choosemaryland.org
McMillan Consulting
828A E. Baltimore St.
Baltimore, MD 21202
Phone: 410-775-6226
Web: http://mcmillancos.com
E-mail: info@mcmillancos.com
McMillan Consulting is not affiliated with the state of Maryland. This document is for
informational purposes. Contact us, the appropriate agency for this credit or your tax
professional for further assistance. You can view Maryland's tax credits by visiting
http://macadvises.net/mdtaxsignal.php and clicking on the MD Business Tax
Credits link. We can send you a hard copy of this or any of our info sheets for Maryland
tax credits.