Incentives for Bioscience Research,
Commercialization and Investment in the Commonwealth
The Commonwealth of Virginia
currently offers tax incentive, grants and investment programs incentivize and
support emerging life science technologies and companies. In recent years Virginia Bio has worked with
allies in informing and supporting public policy makers in the conception,
passage and implementation of these laws.
Refundable Research & Development Tax Credit
The Refundable Research & Development Refundable Tax Credit provides a credit against income tax owed up to
15% credit of first
$167,000 of qualified research (20% of first $175,000
if the research was done with a Virginia University). If the Company is not profitable or otherwise owes no tax in a year, the credit is refundable in cash. The maximum credit to any one company is $35,000. There is a $5 milliion cap of available credits per year from 2011-2016
- Form RDC: Application for the Refundable R&D Tax Credit. Due April 1st.
- Virginia Department of Taxation Information Page (VA Refundable R&D Credit)
- Link to original legislation (SB 1326, 2011)
View a brief video explanation produced by the Virginia Society of Certified Public Accountants.
100% Capital Gains Tax Exclusion for Investors and Founders
Capital Gains Tax Exclusion provides a
100% capital gains tax exclusion for founders of and investors in high
technology (including life sciences) start-up companies primarily
engaged in business and with principal office in Virginia. (May be used
instead of the Angel Investor Tax Credit). The Company must have had
less than $3M revenue in the fiscal year prior to the investment. The
exemption has been extended to June 30, 2015.
- Virginia Secretary of Technology Information Page (Capital Gains Exclusion)
- Link to certification form from the Secretary of Technology (Application)
- Link to original legislation (SB 428, 2010)
Qualifying for the Capital Gains Exclusion: 1. When filing your taxes, fill out the appropriate tax form.
The following tax forms & schedules include this exemption: Form
500 ADJ, Form 502 ADJ, Form 760 Schedule ADJ, Schedule 760PY ADJ, and
Schedule 763 ADJ. OR 2. Have the business in which you are investing
apply through the Secretary of Technology’s office for certification that the company is an approved technology company. And then submit the appropriate tax form.
The Virginia Angel Investor Tax Credit (Virginia Qualified Equity & Subordinated Debt Credit)
The Angel Investor Tax Credit
(Virginia Qualified Equity and Subordinated Debt Credit) provides tax
credit for individuals or corporations making an investment in a
Virginia businesses in biotechnology, medical device or other similar
technology, to commercialize technology developed at or in partnership
with a Virginia institution of higher learning equal to 50% of qualified
investment, up to $50,000. There is a $5 million cap in available
credits each year.
- Virginia Department of Taxation Information Page (VA Angel Investor Credit).
- Link to Qualified Business Application form (Form QBA) Due December 31.
- Link to Investor Application form (form EDC) Due April 1.
- Link to original legislation (SB 1338, 2009)
R&D Sales Tax Exemption
The R&D Sales Tax Exemption
provides 100% exemption from state sales tax on purchase of R&D
supplies and equipment, and bio manufacturing production equipment.
Small Business Innovation Research Matching Funds
The SBIR (Small Business Innovation Research) Matching Funds Program of CRCF (Commonwealth Research & Commercialization Fund) awards grants of up to $50,000 to Virginia-based technology companies that have won a Phase 1 SBIR Award from the National Institutes of Health (NIH). $3 million in Fiscal Years 2013 and 2014 designated for SBIR awards and for matching federal Small Business Technology Transfer (STTR) awards.
Commonwealth Research and Commercialization Fund
The Commonwealth Research Commercialization Fund (CRCF) awards grants and loans to advance targeted research and commercialization in Virginia. $9.6 million of new funding was added for Fiscal Years 2013 and 2014.
The three main subprograms are:
- Research Matching: Awards to collaborative research partners seeking outside grants but cannot identify a suitable match
- Facilities Enhancement: Awards to qualifying public or private
higher education institutions and political subdivisions in Virginia to
help finance facilities used for qualified research or technology
- Commercialization: Awards to encourage the commercialization of products and services in Virginia
Virginia Bioscience Health Research Corporation Grants
The Virginia Bioscience Health Research Corporation awards grants based on the following:
- Grants to collaborations involving at
least two Virginia research universities and one industry partner in the
bioscience field in order to accelerate translational research and
- Grants require proportionately matched
industry partner funding scaled for size of enterprise
- Letters of intent, applications and
awards on ongoing basis; awards in range $200,000-$800,000.
Seed Stage Investment (CIT GAP Fund)
CIT GAP Funds is a family of seed- and early-stage investment funds placing near-equity and equity investments in Virginia-based technology, life science, and cleantech companies. There is $4.6 million of new funding for Fiscal Years 2013 and 2014.
CIT Biolife Fund