Tax credits proposed for firms

January 03, 1995|By James M. Coram | James M. Coram,Sun Staff Writer

Howard County's economic development director wants the county to become a force in the burgeoning biotechnology industry, but says he first needs help from the County Council.

Richard W. Story, executive director of the county Economic Development Authority, is asking the council to grant property tax credits to high-technology companies engaged in research and development as a way of attracting new businesses. The credits would apply to new equipment only.

The credits would reduce the county tax burden on new equipment by 75 percent, putting local research and development businesses on par for taxes with those in neighboring jurisdictions, Mr. Story said.

A bill granting the tax credits will be introduced before the council tonight and is scheduled for a public hearing Jan. 17. The council is scheduled to vote on the bill Feb. 6.

The bill "is part of our commitment to attract quality jobs for the citizens of Howard County," Mr. Story said. "This obviously plays to the high-tech, high-paying, full-pay, full-fringe type employer."

He said that many county workers commute elsewhere to work in the kind of high-level jobs he thinks would increase in Howard County if the council approved the tax credit.

And if the county agrees to grant the credits, he already has a recipient in mind: a prominent biotechnology company that Mr. Story hopes will move its corporate headquarters to the county. He declined to identify the organization, but said it has a branch office in the county and is looking to move its headquarters to the Washington-Baltimore area.

Granting the company and others like it tax relief would "obviously be a show of partnership from local government," Mr. Story said.

"The life sciences are one of the industries that have tremendous growth potential, and we have a critical mass to build from," he said.

The lack of a local tax credit for research and development companies hurts the county, Mr. Story said, because "our competitors [Montgomery and Prince George's counties] already grant tax relief" to research and development businesses.

The company he is wooing "or any other company could go to the Prince George's portion of Laurel where they already have a 75 percent [tax] credit" on new equipment, Mr. Story said. He noted that the county is geographically between such regulatory agencies as the National Institutes of Health, the Food and Drug Administration and the National Institute of Science and Technology in the Washington, D.C., area and research facilities such Johns Hopkins Medical School in Baltimore and the Columbus Center for marine biology, now under construction in the city.

"Guess who's the link in the life sciences corridor?" he asked. "We are the logical way to bring [Baltimore- and Washington-based organizations] together. We have room to grow and we have a superior quality of life."

Mr. Story and County Executive Charles I. Ecker plan to brief Chamber of Commerce officials this morning on the tax credit proposal.

Chamber representatives said last week that while they generally favor government initiatives designed to support existing businesses and attract new ones, they want to wait to comment on this proposal until after the briefing.

But Henry "Pete" Linsert Jr., chairman and chief executive officer of Martek Biosciences Corp., praised the idea.

He said a tax credit on new equipment would "obviously be a plus" to his county-based biotechnology company "and anybody else in R & D" because "we buy a lot of equipment."

A research and development tax credit would be "one more reason to locate and stay in a place we think is terrific," Mr. Linsert said.

Mr. Story said county financial experts still are calculating the financial impact of the tax credit bill.

But he is confident that the credit would not cause the county to lose tax revenue because it would apply only to new equipment. Existing equipment would continue to be taxed. Any loss in future taxes because of new purchases would be offset by growth in new business, Mr. Story said.

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