Massachusetts Employment Incentive Payments

Biotechnology and Medical Device Manufacturing Industries

A recently enacted administrative provision authorizes the Commissioner of Revenue to make job incentive payments to qualifying biotechnology and medical device manufacturing companies. This is a direct payment to a qualifying company that increases its level of Massachusetts's employment by at least 10 full-time equivalent jobs (in both overall jobs and biotechnology jobs) over the previous calendar year. A biotechnology job is defined as one in which an employee of a biotechnology or medical device manufacturing company performs qualified services such as medicinal and botanical manufacturing, pharmaceutical preparation manufacturing and surgical and medical instrument manufacturing. 

The subsidy is equal to 50% of the salary attributable to the increase of biotechnology jobs multiplied by the Massachusetts personal income tax rate. The payment is made in equal installments to qualifying companies over a three-year period. During this three-year period, the company must maintain or increase its employment for both overall jobs and biotechnology jobs. Otherwise, it will lose its remaining benefit. 

For example, assuming an increase of at least 10 overall jobs, salary attributable to an increase of 10 biotechnology jobs totaling $800,000 in 2004 will result in a jobs incentive payment totaling $21,200 ($800,000 X 5.3% X 50%). This amount would be paid in equal installments over a three-year period beginning in 2005. Scheduled payments in 2006 and 2007 will depend on retaining such increased jobs for both overall and biotechnology jobs in 2005 and 2006, respectively. 

The jobs incentive payment is first available in calendar year 2005 and is based on the increase of at least 10 full-time biotechnology jobs in calendar year 2004 over the company's weighted average employment in calendar year 2003. A job incentive payment request must be submitted in the calendar year immediately following the increase year. For example, the request must be filed by December 31, 2005 for the 2004 jobs increase year. 

More specific information may be found on the Massachusetts Department of Revenue’s Web Site, the Online Legal Library for Technical Information Releases (TIRs) TIR 04-19. http://www.dor.state.ma.us/rul_reg/OLL_TIR.htm

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