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These days bipartisanship at any level of government is a welcome development. Last month, there was such a joint effort at the state level when the Senate Budget and Taxation Committee took up SB 203, which deals with a research and development tax credit. Members of both parties are sponsoring the legislation.

The bill raises the existing research and development tax credit total that the Department of Business and Economic Development can approve in a calendar year from $6 million to $18 million. The measure also allows a refundable credit for small businesses that have net assets of less than $5 million. The House Ways and Means Committee conducted a hearing in late February on the cross-filed legislation, HB 386.

It’s understandable why lawmakers on both sides of the aisle seem receptive to the legislation. To get a picture of the efficacy of such a tax credit, it’s instructive to look at a discussion last year on whether to extend a similar but much larger federal R&D tax credit.

The authors of a report on the federal tax credit — two University of California, Berkeley researchers — said tax incentives for business R&D have become an “important tool used by countries to build their innovation capabilities and bolster their growth.” That’s even more so as business R&D investment has become increasingly globalized. Countries are competing to attract businesses that often are willing to relocate anywhere.

Now extrapolate to the state level. Nearby Pennsylvania, Virginia and New Jersey all spend considerably more than Maryland does on research and development tax credits, said Sen. Nancy J. King (D-Motgomery) of Montgomery Village, who sponsored the Senate version of the bill that has 13 co-sponsors. All told, 43 states offer an R&D tax incentive, according to the Texas Legislative Budget Board.

The small-business provision in Maryland’s bill is a change from similar legislation that passed the Senate last year but died in the House. Advocates are hoping the alteration will propel the bill to passage this year.

“This would allow not-yet-profitable companies to get tax credits immediately,” Brian Levine, vice president of government relations for the Tech Council of Maryland, testified at the Senate hearing.

The tax credit doesn’t come without an immediate cost, of course. General fund revenues would take a $4.7 million hit in fiscal 2014 as a result of additional tax credits being claimed against the corporate income tax, according to the Department of Legislative Services’ fiscal note on the bill. The loss is projected to increase to $8.7 million in fiscal 2017. Other state funds also would experience smaller losses.

But the hope is that the tax credits will generate more research. And beyond that, lower taxes for the targeted high-tech companies can “potentially spur growth for these companies and assist in the State’s ability to attract and retain these companies,” according to DLS.

Maryland, because of its proximity to Washington, D.C., and its quality-of-life advantages, is positioned attractively but still must prove it is business friendly and willing to compete in offering sensible financial incentives. Expansion of the R&D tax credit seems to fill the bill.