On June 15, the Massachusetts State Legislature passed a comprehensive package of development incentives and project funding aimed at revitalizing the state’s economy. In its second “economic stimulus” bill in the past three years, the legislature approved a MassMEDIC-developed proposal that will grant a 100% tax credit to Massachusetts medical device companies for user fee payments made to the FDA for products to be manufactured within the state.

The proposal was passed by the Legislature as part of the first “economic stimulus” package in November, 2004. At that time, Governor Romney vetoed the measure.

In 2006, the tax credit for user fee payments was included in both the “economic stimulus” bill and the State’s budget for fiscal year 2007. The proposed tax credit received widespread support among legislators, who were anxious to support the continued growth and expansion of the medical device industry in Massachusetts.

The provision, the first of its kind in the nation, will provide a 100% credit on state taxes for the total amount of user fee payments made to the FDA for product review purposes in a tax year. The credit’s authorizing language also allows early-stage companies that are not currently generating revenue, to sell the credit for use by third parties.

MassMEDIC members will be notified of further action on the tax credit in the coming days.

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