Maryland business leaders this week strongly backed a bill that would triple the value of research and development tax credits that the state can approve.
Besides raising the tax credit cap to $18 million from $6 million, the measure would allow a refundable credit for small businesses that have net assets valued at less than $5 million, advocates said.
“This would allow not-yet-profitable companies to get the tax credit immediately,” Brian Levine, vice president of government relations for the Tech Council of Maryland, said in a hearing Wednesday before the Senate Budget and Taxation Committee.
The small-business provision is a change from similar legislation that passed the Senate last year before dying in the House. The proposal would “work well” in conjunction with others such as the biotechnology investment tax credit program, said Jonathan Sachs, director of public affairs for the Montgomery County Chamber of Commerce.
The proposed fiscal 2014 budget of Gov. Martin O’Malley (D) would raise the research and development tax credit cap to $8 million from $6 million, and the biotechnology investment tax credit limit to $10 million from $8 million.
In fiscal 2015, the program would cost the state $6.1 million and $8.5 million the following year, according to a legislative analysis.
Pennsylvania, Virginia and New Jersey all spend significantly more than Maryland for research and development tax credits, said Sen. Nancy J. King (D-Dist 39) of Montgomery Village, who sponsored the Senate version that has attracted 13 co-sponsors. A similar bill filed by Del. Kumar P. Barve (D-Dist. 17) of Gaithersburg in the House has attracted 11 co-sponsors and is slated for a hearing at 1 p.m. Tuesday in the House Ways and Means Committee.
Representatives from the Maryland Chamber of Commerce, Greater Baltimore Committee, Manufacturers’ Alliance of Maryland and state Department of Business and Economic Development also testified in support of the bill Wednesday.
A measure that would create a new workforce development initiative called the Maryland Employment Advancement Right Now program passed the full Senate this week and heads to the House Economic Matters Committee.
The program was proposed by O’Malley to fund grants managed by the Department of Labor, Licensing and Regulation for training collaborations involoving businesses, government and nonprofits.
The Maryland chamber supports the bill, saying in a report that it would help close the gap between employers’ needs and job-seekers’ skills.
Another bill that would lower the corporate income tax rate filed by Sen. Robert Garagiola (D-Dist. 15) of Germantown has attracted 10 co-sponsors. It would reduce the corporate income tax rate more gradually than some other proposals, from 8.25 percent to 8.20 percent for 2013, and down to 7.75 percent for 2022 and beyond.
A proposal sponsored by Del. Kelly Schulz (R-Dist. 4A) of New Market would reduce the state corporate income tax rate more drastically, to 6 percent as of July from 8.25 percent. That bill is due for a hearing at 1 p.m. Tuesday in the House Ways and Means Committee. Sen. David R. Brinkley (R-Dist. 4) of New Market authored a similar bill, which had a hearing a few weeks ago.
The Maryland chamber favors another phased plan, reducing the corporate income tax by 0.25 percentage points each year for five years, until it reached 7 percent.