The Biotechnology Industry Organization (BIO) announced today it has joined the Coalition of Small Business Innovators (CSBI). CSBI is a national, non-partisan coalition of organizations dedicated to stimulating sustained, private investment in small, highly innovative companies focused on the development of new technologies.
BIO represents over 1,100 biotech innovators in all 50 states. Nationwide, these biotech firms employ 1.61 million Americans and support an additional 3.4 million jobs, according to Battelle. Emerging biotech companies face a decade-long, billion-dollar R&D timeline, virtually all of which must be funded by private investors. These companies often have no product revenue to fund their search for breakthrough therapies, so the tax code is of vital importance in order to spur investment in lifesaving R&D. In addition to lowering the corporate tax rate and the enactment of a competitive territorial tax system, Congress should take steps, through tax reform, to incentivize investment in innovative small companies like emerging biotechs and support the development of next generation technologies.
”BIO is pleased to join the Coalition of Small Business Innovators and strongly supports the Coalition’s efforts to spur innovation through the tax code,” said Jim Greenwood, BIO President and CEO. “BIO is proud to partner with the wide array of research-intensive industries in the Coalition of Small Business Innovators and looks forward to working with the Coalition and Congress to enact tax legislation that promotes innovative R&D by growing biotech innovators.”
The Coalition’s legislative objectives are to modernize the current U.S. tax code to recognize and promote small business innovation as fundamental to the long-term growth of the U.S. economy. The Coalition’s objectives are:
• Stimulating private capital for research by relaxing the passive activity loss rules in Section 469 for small research-intensive companies;
• Removing financing restrictions in Section 382 to allow small companies to retain their net operating losses generated by R&D expenditures; and
• Improving capital gains treatment for small research-intensive companies by changing the gross assets test in order for these companies to qualify for Section 1202.
The Coalition supports a U.S. tax code that recognizes innovation as a crucial part of the 21st century American economy and believes that, by itself, a lower corporate tax rate will not support growth and innovation in America’s small businesses, many of which are pre-revenue. The Coalition advocates for policymakers to both lower the corporate rate and to specifically promote innovative pre-revenue research-intensive businesses through incentives which spur private investment, encouraging other companies, individuals, and funds to invest in small companies and support their research.