With President Barack Obama and Congress professing seriousness about ending the era of annual trillion-dollar deficits and deflating the national debt once and for all, it wouldn’t appear to be the right time to seek additional tax breaks from Washington. That’s not the thinking, though, of the biotechnology and pharmaceutical sector including companies, academic institutions, and industry groups in four states.

The Life Sciences Coalition joined with some members of Congaress in trying to squeeze out some additional incentives for the industry, with the promise that the breaks will allow it to grow faster in the U.S. and better compete with other nations around the world for life science companies and their jobs.

    The Life Sciences Jobs and Investment Act of 2011 (S. 1410 and HR 2632) lets businesses choose from a pair of tax breaks. One is a 40% credit toward the first $150 million of R&D, double the current 20%. The other option lets businesses repatriate to the U.S. up to $150 million a year of profits from overseas operations at a 5.25% tax rate compared with the current repatriation tax rate of 35%, provided those funds are used in the U.S. solely to:hire additional scientists, researchers, and comparable personnel engaged in life science research;
    invest in life science research at U.S. universities, U.S. post-graduate institutions, not-for-profit research consortia and research incubators, as well as comparable U.S. scientific organizations; and
    invest in new laboratory and related life science research facilities.

“The five-year period presents an opportunity for companies to bring back $750 million. It’s a much longer term than the repatriation [one-year tax-rate reduction or “holiday”] in ’04 or the current proposals for repatriation, which are one-year proposals,” David Jory, a spokesman for the Life Sciences Investment Act Coalition, told GEN.

As a result, he said, the bill should succeed where the 2004 repatriation holiday failed, namely in persuading global life sci companies to return money invested overseas back to the U.S. and keep it here.

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