Nevada County Picayune and Gurdon Times Newspaper Archive

Biotech Industry Gets Tax Breaks From Assembly

from State Sen. Mike Ross

There are several ways that government can help the state's economy, such as tax policy, education, job training and regulatory reform.

To keep pace with technological changes in the global economy, the Arkansas General Assembly in 1997 enacted tax incentives to encourage research and development of biotechnology. The incentives are in Act 1117 of 1997.

A growing number of political and business leaders believe Arkansas should promote high-technology industries, because assembly-line jobs and low-skilled manufacturing jobs are moving overseas.

The goal of Act 1117 is to promote the development of research in biochemistry, molecular biology, genetics and bioengineering. Advances in those fields can benefit the state's agriculture, forestry, aquaculture and environmental industries. Also, research in those areas will benefit the pharmaceutical and medical industries.

For example, with new techniques in genetic engineering farmers have developed crops that are resistant to disease and drought. The poultry industry breeds chickens that mature rapidly and grow more meat.

State officials estimate that salaries in high-technology industries are almost 50 percent higher than overall average salaries.

Act 1117 grants corporate income tax credits for research facilities that can amount to 5 percent of the total cost of the facility. The cost of buying undeveloped land cannot be including in determining the amount of the credit, however.

The act also grants income tax credits to corporations to offset up to 30 percent of the costs of training employees in biotechnology. Companies can also qualify for income tax credits if they enter into partnerships with the research departments of state universities and colleges. When industries contract with universities for research, they can get credits of up to 30 percent of the amount of the contract.

Income tax credits of up to 20 percent are available for companies to offset the cost of licensing, developing and protecting intellectual property used in biotechnology. The definitions of intellectual property in the act include patents, copyrights, trademarks and trade secrets.

Leaders in business and government hope one effect of the act will be to encourage graduates of Arkansas colleges and universities to remain in the state to work.

The companies that qualify for the credits can offset the first $50,000 of its income tax liability, and also may apply for credit for half of their remaining income tax bill. The director of the Arkansas Industrial Development Commission must certify to state tax authorities that the eligible company is engaged in biotechnology.

>Forestry Degree Offered

The University of Arkansas at Monticello will offer master's degrees in forestry beginning in the 1998 fall semester.

The state Board of Higher Education recently approved the university's application to establish the degree program.

Officials said that UAM's affiliation with the University of Arkansas Agricultural Experiment Station helped win approval of the new program. The experiment station supports research at the university.

School officials said that addition of the program will help UAM compete for grants, and will make the campus more attractive to undergraduates.