University of Miami Research Complex Paves Way for Biotech Companies in Miami
This September the University of Miamis Tissue Bank will be relocating to a new $11.5 million facility. Moving from its current building to what is envisioned as a multi-enterprise commercial complex, the tissue bank is expected to prompt research and other medical companies to consider Miami as the new hotspot for biotechnology ventures. With the first building in the complex already nearly two-thirds leased, it appears that the University of Miamis efforts are having some success in bringing companies (and jobs) to the area.
The new complex will serve as an incubator for biotechnology companies seeking to test the market in South Florida. This idea is not new for the State, as the Sid Martin Biotechnology Incubator, housed in Alachua County, has been attracting biotech companies to Florida since 1995. Considering the success of the Sid Martin Biotechnology Incubator, those involved in the University of Miamis new project are confident that Miami will soon serve as a focal point for start-up companies, as well as established biotechnology operations in the coming years.
While many biotechnology companies are currently concentrated in the Northeast region of the U.S., Florida has been experiencing rapid growth in this industry over the last decade. Partially due to efforts of the Florida legislature and BioFlorida, the states bioscience industry association, biotech companies are moving from the northeast and west coast of the U.S., in order to become part of this emerging market. For example, Scripps Research Institute, a biomedical research institute headquartered in California, opened its sprawling research facility, Scripps Florida in 2009. Located in Palm Beach County, the research facility moved to Florida in part due to efforts by the Florida legislature. Seeking to stimulate growth of the biotech industry within the State, legislators offered support for the project by way of a $310 million appropriation. Additionally, Palm Beach County provided various incentives aimed at bringing Scripps to the area, including funding for land and related start-up costs.
By seeking to establish Florida as a hub for the biotechnology industry, Scripps Florida is but one example of how the States incentives have lured companies to the state. For instance, one of the biggest advantages of “setting up shop” in Florida is its extremely favorable tax structure. There is no state income tax imposed on partnerships, limited partnerships, limited liability companies, limited liability partnerships, or subchapter S-corporations. Additionally, the state income tax imposed on C-corporations is only 5.5%. Also, as guaranteed by the Florida Constitution, employees of all of Florida based entities enjoy the absence of a state personal income tax.
In addition to favorable income tax treatment, there is no sales tax on purchases of raw materials incorporated into a final product for resale, including non-reusable containers or packaging. Furthermore, Florida offers sales and use tax exemptions for numerous business processes such as:
- Machinery and equipment used by a new or expanding Florida business to manufacture, produce or process tangible personal property for sale;
- Labor, parts and materials used in repair of and incorporated into machinery and equipment;
- Electricity used in the manufacturing process;
- Certain boiler fuels (including natural gas) used in the manufacturing process;
- Semiconductor, defense and space technology-based industry transactions involving manufacturing equipment;
- Machinery and equipment used predominantly in research and development; and
- research and development labor expenditures.
Despite all of the benefits built into the taxing scheme of Florida, there are additional incentives available to certain industries and businesses that achieve certain goals. For instance, the Qualified Target Industry Tax Refund Incentive (QTI) provides refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium, and certain other taxes for businesses that create high wage jobs in targeted high value-added industries. Also, the Capital Investment Tax Credit is an annual credit that is provided for up to 20 years against the corporate income tax. It is specifically available for designated high-impact portions of the certain sectors, including clean energy, biomedical technology, financial services, information technology, silicon technology, transportation equipment manufacturing, or be a corporate headquarters facility.
Florida also provides a negotiated grant under the High Impact Performance Incentive to pre-approved applicants in certain high-impact sectors designated by the Governor’s Office of Tourism, Trade and Economic Development (OTTED). In order to participate in the program, the project must:
- operate within designated high-impact portions of the following sectors– clean energy, corporate headquarters, financial services, life sciences, semiconductors, and transportation equipment manufacturing;
- create at least 50 new full-time equivalent jobs (if a R&D facility, create at least 25 new full-time equivalent jobs) in Florida in a three-year period; and
- make a cumulative investment in the state of at least $50 million (if a R&D facility, make a cumulative investment of at least $25 million) in a three-year period.
The biotech market fits perfectly within the purview of Floridas numerous incentives aimed at bringing industry to the state. Coupled with the states advantageous tax structure, this provides a favorable environment for these industries to make the shift to Florida.
For more information regarding biotechnology issues or any information regarding starting a business in Florida, please contact us at contact@fidjlaw.com.