California To Boost Clinical Research

Before the end of September, Governor Wilson of California is expected to sign a tax package which would permit manufacturers of pharmaceuticals, biological products and medical devices to apply a 24% credit to expenditures on clinical research conducted in university hospitals and certain cancer treatment centers within the state. This is the first time that basic research has been defined for tax purposes as including work carried out at university hospitals.

A further provision to encourage research includes raising the credit for applied research from 8% to 11%. Together, these two breaks are expected to benefit companies in California by some $55 million over the next three years.

The package includes a total of 24 individual tax breaks for industry, estimated to total $279 million in lost revenue for the state.