iBIO thanks Congressman Brad Schneider (D-Ill.) for his leadership in encouraging investment in start-up life sciences companies by introducing the Invest in Innovative Small Businesses Act (H.R. 4175) in the U.S. House of Representatives.
The life science community is developing cutting edge therapies and products to improve and save patients’ lives. Investment in early stage life sciences companies has seen a 9% decrease in the past decade, legislation like HR4175 will incentivize investment for these early stage companies.
The bill would create a tax credit for investing in pre-revenue companies engaged in a high-technology field such as medical devices or diagnostics. In addition, the company has to have fewer than 250 employees, be headquartered in the U.S. and have been in existence for less than 12 years.
The credit would be equal to 25% of the investment, and be temporary and capped, so that over the lifetime of the investor the total amount of credits would be limited to $25 million, and to no more than $5 million in a single year. This bill is modeled on popular state based investment incentives like Illinois Angel Tax Credit.
Illinois’ Angel Tax Credit was recently reauthorized and has been a critical tool for our startup companies in the life sciences community. Since its introduction in 2010 the Illinois tax credit has provided over $27m in investments in our community.
As Congress continues work on broad tax reform, inclusion of a federal innovation investor credit would promote the administration’s goals of boosting economic growth and job creation, while helping ensure the U.S. maintains its position as the world leader in medical advancement.