Minnesota continues to lose ground to other states in competing for R&D jobs and investment. In 1984, Minnesota was the leader – the first state to institute an R&D tax credit. Today, our support for R&D is quickly sliding down the rankings in competitiveness.
Currently, 39 states offer R&D tax credits for qualifying research expenses—10 of these states offer refundability. Additionally, a significant number of counties now offer robust R&D tax credits as a part of their innovation-led economic development strategies. Minnesota’s antiquated and weak R&D tax credit puts our state’s economic future at risk.
The Office of the Legislative Auditor is conducting an evaluation of the R&D tax credit and will publish a report in early February. MAA will report back the findings of this report.
The time is NOW to make this tax credit more robust. Minnesota’s Medical Alley is seeing a resurgence in research and development in health technology startups, most notably our expanding digital health community. Investors are looking to Minnesota because we have the talent, ecosystem, and expertise. A more competitive R&D tax credit would seal the deal for investors to invest in Medical Alley.