The Biotechnology Tax Credit allows investors and owners of qualified emerging technology companies (QETCs) focused on biotechnology, to claim a tax credit against the General Corporation Tax and Unincorporated Business Tax for amounts paid or incurred for certain facilities, operations, and employee training in New York City. The credit can only be claimed for a maximum of three consecutive years beginning on or after January 1, 2010, and on or before January 1, 2019.
A QETC is a company located in New York City that has total annual product sales of $10 million or less, and meets either of the following criteria: Its primary products or services are classified as emerging technologies; or It has research and development (R&D) activities in New York City, and its ratio of R&D funds to net sales equals or exceeds the average ratio for all surveyed companies classified (as determined by the National Science Foundation).
Eligibility: To Claim the Biotechnology Tax Credit the taxpayer must also meet the following criteria:
- Have 100 full-time employees or less, with at least 75% of those employees employed in New York City;
- Have a ratio of research and development funds to net sales which equals or exceed six percent (6%);
- Have gross revenues which did not exceed twenty million dollars for the immediately preceding year.
The amount of the credit is the sum of the following amounts:
- 18% of the cost or other basis of research and development property, and certain other costs and fees incurred in connection with emerging technology activities;
- 9% of qualified research expenses paid or incurred by the taxpayer;
- 100% of high-technology training expenses paid or incurred by the taxpayer, limited to $4,000 per employee per year.
The total amount of credit allowable to a taxpayer cannot be more than $250,000 per year. Additional details on emerging technology definitions and eligibility requirements are available in the NYC Department of Finance Biotechnology Tax Credit Application Definitions and Instructions, linked below.
The QETC facilities, operations, and training credit may be claimed for three consecutive tax years. A portion of this credit that cannot be applied to the current year’s tax liability may be refunded without interest, or applied as a payment against next year’s tax. A taxpayer filing as a member of a combined group may claim the QETC facilities, operations, and training credit. The credit is computed on a separate basis and applied against the combined tax.
The Department of Finance will make a determination of the amount of biotechnology credit the taxpayer may claim on its General Corporation Tax or Unincorporated Business Tax return and mail a certificate of eligibility to the taxpayer indicating that amount on or before February 15th.
NYC Department of Finance (DOF)
Biotechnology Credit Application Section
59 Maiden Lane, 20th Floor
New York, NY 10038
For further assistance, please call 311 and ask for: NYC Biotechnology Credit