• Healthcare Reform--New Tax Credit Available to Small Biotechs Prepared to Act Promptly
  • April 20, 2010 | Authors: Joseph G. Howe; Ira D. Moskatel; Timothy O'Grady; Steve Parker
  • Law Firms: Arnold & Porter LLP - Washington Office ; Arnold & Porter LLP - Los Angeles Office ; Arnold & Porter LLP - New York Office ; Arnold & Porter LLP - McLean Office
  • Within the more than 900 pages of the Patient Protection and Affordable Care Act (PPACA) is a provision for very significant tax credits or, if elected, outright cash grants for small companies devoted to developing new pharmaceuticals, drug delivery technologies, and molecular-level diagnostics. The full details of the Therapeutic Discovery Project Credit will not be available until the US Department of the Treasury carries out its mandate to establish the program by May 29, 2010. In the meanwhile, companies that may be eligible should begin preparing immediately to make the necessary applications, which will involve considerably more than filling out conventional tax forms. The Credit (including both the tax credit and the alternative elective grants) is limited to US$1 billion in the aggregate and only applies to the 2009 and 2010 taxable years. Accordingly, there is likely to be significant competition for the Credit and it will be very important to move quickly once Treasury issues the enabling regulations. www.arnoldporter.com