Massachusetts General Laws (Tax)

Mass. Gen. Laws ch. 62C, § 67D

Biotechnology or medical device manufacturing companies; jobs incentive payment

[Text of section applicable as provided by 2003, 141, Sec. 78.] Section 67D.

# (a)

When used in this section, the following words shall have the following meaning: ''Application year'', the calendar year for which a biotechnology or medical device manufacturing or marine science technology company submits the information required for a determination as to a jobs incentive payment. ''Biotechnology company'', a business primarily engaged in the research, development, production or provision of biotechnology for the purpose of developing or providing products or processes for specific commercial or public purposes including, but not limited to, medical, pharmaceutical, nutritional and other health-related purposes or a person engaged in providing services or products necessary for such research, development, production or provision. This term shall include contract manufacturers engaged in the production of biotechnology products for a biotechnology company or a medical device manufacturing or marine science technology company. ''Business'', a corporation, sole proprietorship, partnership, limited liability company or any other form of business organization. ''Commissioner'', the commissioner of revenue. ''Eligible Jobs'', a number determined by first multiplying each of the local jobs created by a biotechnology or medical device manufacturing company during a single calendar year by the job qualifier for that job, and then totaling the number for all of the local jobs created. ''Full time employee'', a person who is employed for consideration for at least 35 hours per week and whose salary is subject to withholding as provided in chapter 62B. ''Job qualifier fraction'', in the case of either a full-time employee or a part-time employee of a biotechnology or medical device manufacturing or marine science technology company, the figure that determines the extent to which that employee is employed in the commonwealth during a single calendar year. The job qualifier fraction for each employer shall be determined by multiplying the following percentages together: (i) the percentage of time that an employee worked while employed by the company expressed as average hours worked per week out of 35 hours, not to exceed 100 per cent; (ii) that employee's time attributable to work in the commonwealth, as a portion of that employee's total work for the company; and (iii) the portion of the year the employee worked for the company. ''Jobs incentive payment'', a business employment incentive payment for biotechnology or medical device manufacturing or marine science technology companies as provided for in this section. ''Local jobs created'', the total number of jobs created by a biotechnology or medical device manufacturing or marine science technology company during a single calendar year in which the new employees perform qualified services at least 1 in-state location, including jobs performed by persons that are transferred within the company to work at an in-state location from a location based outside the state. ''Marine science technology company,'' a business engaged in research, exploration, operations, monitoring, or defense in marine settings. This term shall include contract manufacturers engaged in the production of these products for a marine science technology company. ''Medical device manufacturing company'', a business primarily engaged in manufacturing medical or surgical instruments, surgical appliances or supplies or electromedical, electrotherapeutic or irradiation apparatus. This term shall include contract manufacturers engaged in the production of such products for a medical device manufacturing company or a biotechnology company. ''Part-time employee'', a person who is employed for consideration for less than 35 hours a week and whose salary is subject to withholding as provided in chapter 62B. ''Payment years'', in the case of a biotechnology or medical device manufacturing or marine science technology company that is determined to be eligible for a jobs incentive payment, the 3 calendar years following the application year. ''Qualified services'', direct production manufacturing services performed by an employee of a biotechnology or medical device manufacturing company during a calendar year that consist primarily of at least 1 of the following services: medicinal and botanical manufacturing, pharmaceutical and preparation manufacturing, in vitro diagnostic substance manufacturing, biological product, except diagnostic, manufacturing, surgical and medical instrument manufacturing, electromedical and electrotherapeutic apparatus manufacturing, surgical appliance and supplies manufacturings and irradiation apparatus manufacturing. These services are as referenced in the federal NAICS Codes for biotechnology manufacturing, numbers 325411–325414, 339112, 314510, 339113 and 334517, respectively or direct manufacturing or professional services performed by an employee of a marine science technology company during a calendar year that consists of research, exploration, operations, monitoring, or defense in a marine setting. ''Weighted, average employment'', for a calendar year, the total number of jobs maintained by a biotechnology or medical device manufacturing or marine science technology company in which the employees performed employment services at at least 1 in-state location. The number is to be determined by first multiplying each of the individual jobs maintained by the company for that year by the job qualifier fraction for that job and then totaling the number for all of these jobs.

# (b)

A biotechnology or medical device manufacturing or marine science technology company that creates 10 or more eligible jobs in the commonwealth during a single calendar year shall be entitled to a jobs incentive payment if its weighted average employment for such year reflects a net increase of at least 10 jobs over the company's weighted average employment for the prior calendar year. The jobs incentive payment shall be equal to 50 per cent of the amount paid by the company as salary attributable to eligible jobs created by the company in such year to the extent that the salary was subject to Massachusetts withholding pursuant to chapter 62B for such year, multiplied by the applicable Massachusetts income tax rate for such salary. For the purposes of this provision, an eligible job shall be deemed created in the commonwealth on the first day for which Massachusetts withholding is required in connection with the compensation paid to the employee.

# (c)

The jobs incentive payment shall be paid to a biotechnology or medical device manufacturing or marine science technology company in 3 equal installments in each of the 3 calendar years commencing with the calendar year subsequent to the application year. If, for the first or second payment year, the company's weighted average employment falls below its weighted average for the application year, the company shall be disqualified from receiving its second installment payment, it may still receive its third installment payment if its weighted average employment for its second payment year is above its weighted average employment for the application year.

# (d)

A biotechnology or medical device manufacturing or marine science technology company that seeks a jobs incentive payment shall apply to the commissioner to receive such payment on a form to be prescribed by the commissioner. This form shall reference the necessary information concerning the eligible jobs created by the company in the Commonwealth during the application year and also the company's weighted average employment for such year and the prior calendar year. The commissioner shall advise the company of his determination in writing.

# (e)

Not later than March 1 of each calendar year for which a biotechnology or medical device manufacturing or marine science technology company has been approved to receive a jobs incentive payment, the company shall submit to the commissioner, in a form prescribed by the commissioner, the information necessary to evaluate the company's prior year weighted employment average.

# (f)

A biotechnology or medical device manufacturing or marine science technology company that has previously been approved to receive a jobs incentive payment is entitled to re-apply for an additional payment for a second or third application year. In such cases, the company may be entitled to receive a jobs incentive payment that relates to different application years in the same calendar year. When a company has previously been granted a jobs incentive payment for 3 application years, it shall not request an additional jobs incentive payment.

# (g)

The commissioner shall issue payments, as authorized in subsection (b), without further appropriation. The commissioner may issue rules and regulations as necessary or helpful to implement this section, including rules and regulations to ensure compliance with this section.

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