Buried in the recently enacted Patient Protection and Affordable Care Act of 2010 is a significant benefit for small- and mid-sized biotech, pharmaceutical and medical device companies. The legislation provides a 50 percent tax credit for investments in qualified therapeutic discoveries for tax years 2009 and 2010, or a grant for the same amount tax free. The latter feature will be of particular benefit to biotech start-up companies as tax credits are worthless to start-ups that are not profitable and do not pay income taxes. The cash grant option will allow more companies to receive an immediate return.
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