Opinion: How Biotechs Can Avoid Unpleasant State and Local Tax Surprises

Mike Puzyk and Paul Buonaguro, attorneys from our Tax & Benefits team, discuss the potential tax pitfalls biotech startups can face when partnering with large pharmaceutical companies, particularly when entering new states. They cover how a collaboration deal can trigger unexpected state income taxes and other local levies due to unfamiliarity with state-specific tax rules. Mike and Paul stress the importance of proactive state and local tax planning, advising startups to understand their tax obligations, utilize tax credits, and negotiate with state authorities to minimize liabilities.