1 | 1 | | |
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2 | 2 | | |
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3 | 3 | | EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW . |
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4 | 4 | | [Brackets] indicate matter deleted from existing law. |
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5 | 5 | | *sb0702* |
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6 | 6 | | |
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7 | 7 | | SENATE BILL 702 |
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8 | 8 | | Q3 4lr2867 |
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9 | 9 | | CF 4lr2827 |
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10 | 10 | | By: Senator Beidle |
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11 | 11 | | Introduced and read first time: January 30, 2024 |
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12 | 12 | | Assigned to: Budget and Taxation |
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13 | 13 | | |
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14 | 14 | | A BILL ENTITLED |
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15 | 15 | | |
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16 | 16 | | AN ACT concerning 1 |
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17 | 17 | | |
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18 | 18 | | Income Tax – Biotechnology Investment Incentive Tax Credit Program – 2 |
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19 | 19 | | Pass–Through Entities 3 |
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20 | 20 | | |
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21 | 21 | | FOR the purpose of allowing a qualified investor that is a pass–through entity that pays a 4 |
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22 | 22 | | certain income tax on behalf of its members to receive and allocate in any manner a 5 |
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23 | 23 | | credit or refund of a credit under the Biotechnology Investment Incentive Tax Credit 6 |
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24 | 24 | | Program; and generally relating to the Biotechnology Investment Incentive Tax 7 |
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25 | 25 | | Credit Program. 8 |
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26 | 26 | | |
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27 | 27 | | BY repealing and reenacting, without amendments, 9 |
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28 | 28 | | Article – Tax – General 10 |
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29 | 29 | | Section 10–725(a)(1) and (6) and (b)(2) 11 |
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30 | 30 | | Annotated Code of Maryland 12 |
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31 | 31 | | (2022 Replacement Volume and 2023 Supplement) 13 |
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32 | 32 | | |
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33 | 33 | | BY adding to 14 |
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34 | 34 | | Article – Tax – General 15 |
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35 | 35 | | Section 10–725(b)(5) 16 |
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36 | 36 | | Annotated Code of Maryland 17 |
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37 | 37 | | (2022 Replacement Volume and 2023 Supplement) 18 |
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38 | 38 | | |
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39 | 39 | | BY repealing and reenacting, with amendments, 19 |
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40 | 40 | | Article – Tax – General 20 |
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41 | 41 | | Section 10–725(d)(3) 21 |
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42 | 42 | | Annotated Code of Maryland 22 |
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43 | 43 | | (2022 Replacement Volume and 2023 Supplement) 23 |
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44 | 44 | | |
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45 | 45 | | SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMB LY OF MARYLAND, 24 |
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46 | 46 | | That the Laws of Maryland read as follows: 25 |
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47 | 47 | | |
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48 | 48 | | Article – Tax – General 26 2 SENATE BILL 702 |
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49 | 49 | | |
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50 | 50 | | |
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51 | 51 | | |
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52 | 52 | | 10–725. 1 |
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53 | 53 | | |
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54 | 54 | | (a) (1) In this section the following words have the meanings indicated. 2 |
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55 | 55 | | |
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56 | 56 | | (6) (i) “Qualified investor” means any individual or entity that invests 3 |
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57 | 57 | | at least $25,000 in a qualified Maryland biotechnology company and that is required to file 4 |
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58 | 58 | | an income tax return in any jurisdiction. 5 |
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59 | 59 | | |
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60 | 60 | | (ii) “Qualified investor” does not include: 6 |
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61 | 61 | | |
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62 | 62 | | 1. a qualified pension plan, individual retirement account, or 7 |
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63 | 63 | | other qualified retirement plan under the Employee Retirement Income Security Act of 8 |
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64 | 64 | | 1974, as amended, or fiduciaries or custodians under such plans, or similar tax–favored 9 |
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65 | 65 | | plans or entities under the laws of other countries; or 10 |
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66 | 66 | | |
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67 | 67 | | 2. a founder or current employee of the qualified Maryland 11 |
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68 | 68 | | biotechnology company, if the company has been in active business for more than 5 years. 12 |
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69 | 69 | | |
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70 | 70 | | (b) (2) Subject to paragraphs (3) and (4) of this subsection and subsections (d) 13 |
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71 | 71 | | and (e) of this section, for the taxable year in which an investment in a qualified Maryland 14 |
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72 | 72 | | biotechnology company is made, a qualified investor may claim a credit against the State 15 |
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73 | 73 | | income tax in an amount equal to the amount of tax credit stated in the final credit 16 |
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74 | 74 | | certificate approved by the Secretary for the investment as provided under this section. 17 |
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75 | 75 | | |
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76 | 76 | | (5) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A CREDIT 18 |
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77 | 77 | | UNDER PARAGRAPH (2) OF THIS SUBSECTION I S A PASS–THROUGH ENTITY THAT 19 |
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78 | 78 | | PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 20 |
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79 | 79 | | ALL MEMBERS OF THE PASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 21 |
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80 | 80 | | CLAIM AND ALLOCATE T HE CREDIT AMONG THE MEMBERS OF THE PASS –THROUGH 22 |
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81 | 81 | | ENTITY IN ANY MANNER . 23 |
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82 | 82 | | |
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83 | 83 | | (d) (3) (I) If the tax credit allowed under this section in any taxable year 24 |
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84 | 84 | | exceeds the total tax otherwise payable by the qualified investor for that taxable year, the 25 |
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85 | 85 | | qualified investor may claim a refund in the amount of the excess. 26 |
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86 | 86 | | |
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87 | 87 | | (II) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A REFUND 27 |
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88 | 88 | | UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT 28 |
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89 | 89 | | PAYS THE INCOME TAX I MPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 29 |
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90 | 90 | | ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 30 |
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91 | 91 | | CLAIM AND ALLOCATE T HE REFUND AMONG THE MEMBERS OF THE PASS –THROUGH 31 |
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92 | 92 | | ENTITY IN ANY MANNER . 32 |
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93 | 93 | | |
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94 | 94 | | SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 33 |
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95 | 95 | | 1, 2024, and shall be applicable to all taxable years beginning after December 31, 2023. 34 |
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