States competing for biomanufacturing investment turn to financial incentives

As competition becomes increasingly fierce for life sciences development, an increasing number of states are offering sales tax exemptions on equipment for R&D and manufacturing — with several exemptions specifically targeting biomanufacturing.

A new report from the Biotechnology Innovation Organization (BIO), in partnership with the Council of State Bioscience Associations (CSBA), reveals how states are implementing these financial incentives and other policies to attract and retain biotech investment.

“Biomanufacturing in the U.S. is seeing rising investment and significant job growth, driven by breakthroughs in biotechnology research and production methods,” according to the report. “Central to that success is the implementation of targeted financial incentives — especially research and development tax credits, investment incentives for facilities and equipment, and job-creation programs.”

Peter Pellerito, the report’s principal author and BIO’s senior policy adviser for federal/state economic development and technology transfer lead, pointed out that 39 states now have R&D tax credits — a significant increase.

“In our early reports several years ago, we had maybe 20 states with R&D tax credits,” Pellerito said in a statement. “Clearly, there is greater recognition of what the life sciences industry brings.”

To provide manufacturing tax relief, the report reveals that 40 states and Puerto Rico are offering sales and use tax exemptions to lower costs for new biomanufacturing and research and development facilities.

The report points to Georgia’s manufacturing investment tax credit offering companies, including biotechnology firms operating in the state, a limited opportunity to apply for an “advantageous” manufacturing investment tax credit to offset their payroll withholding tax liabilities.

“There is a full spectrum of state and regional economic development measures now in place to support location siting of a manufacturing facility, including offering tax incentives, streamlining permitting processes and investing in workforce development programs to ensure a skilled labor pool,” the report finds.

Workforce development initiatives

When it comes to workforce development, the report called out several states for their innovative programs, including Ohio and North Carolina.

In September, the state of Ohio, the Ohio Life Sciences Association, and JobsOhio announced plans to invest $30 million over five years to develop the state’s biomanufacturing workforce. JobsOhio will work with industry to build a new training center, while Ohio Life Sciences will oversee operations and collaborate with Ohio higher education institutions to “deliver curricula, creating a hub and-spoke program of community colleges and technical schools spanning the entire state,” according to the report.

States are helping to fund community colleges and universities to create certificate programs for in-demand roles such as laboratory technicians and clinical research associates. By aligning curricula with industry needs, states are helping to ensure that graduates have the technical and analytical skills required for biomanufacturing, lab research, and clinical development, the report finds.

North Carolina has several life science-specific workforce development programs including the Biomanufacturing Research Institute and Technology Enterprise (BRITE), which offers training in drug discovery, biomanufacturing, pharmaceutical sciences, and clinical research sciences, according to the report. BRITE was initially funded by the Golden Leaf Foundation but currently receives funding from the state.

“Smart investments in biomanufacturing, research, and workforce development don’t just bring effective medicines to patients, they also foster economic vitality across the country,” John F. Crowley, president and CEO of BIO, said in a statement. The report notes that U.S. companies last year accounted for 40% of global biotech market revenue.

While California is home to the most biotech firms in the U.S., manufacturing-related life sciences jobs in the state dropped 3.7% year over year in 2024, according to trade association Biocom California. Despite the loss of jobs last year, California remains the nation’s biomanufacturing leader and continues to attract significant investment, the report found.