$100 Million invested into medical technology

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The American medical technology company, Becton Dickinson (BD), which produce more than two billion insulin syringes per year, have announced a $100 million research project to expand the company’s Nebraska research facility.

The investment will support new manufacturing equipment and technology to expand production for BD insulin syringes. Insulin syringes are used by approximately 40 percent of people with diabetes as part of their management regimen. This research investment will provide significant benefits to the diabetes population and underscores BD’s commitment to supply high-quality, industry-leading syringes to patients.

BD’s Nebraska facility is 350,000 square feet in size and was established in 1966. The facility houses more than 650 employees and manufactures 20 different products.

This is not the first time BD has significantly invested into research and development. In August 2016, after 60 years of running its facility in Utah, the company completed a $20 million facility upgrade. The upgrade allowed for more space and technology to produce IV catheters and valves, blood collection devices and surgical products.

The Utah facility was first purchased in 1956 and has since grown to 440,000 square feet in size and 1,200 employees. The research facility was the first to use renewable energy sources and later became landfill-free, where waste is reduced, recycled or converted into energy.

Companies like BD demonstrate the significant positive outcomes that result from investing in R&D. If you believe your company is incorporating research and innovation into its business activities, it may be eligible for an R&D tax credit. To find out more contact a Swanson Reed R&D Tax Advisor today for an assessment.

Nebraska’s New Power Plant to Reduce CO2 Emissions

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Over half of the electricity in Nebraska is produced by coal-fired plants. However, two-thirds of the electricity generated by Monolith Materials’ proposed $50 million manufacturing headquarters will be from carbon-free sources such as nuclear, hydro and wind. The Lincoln plant is expected to be in operation by 2020 or 2021. It is expected to bring 200 jobs to the plant and potentially 600 spinoff jobs.

Monolith Materials have developed a way to produce carbon black using natural gas rather than crude oil or coal tar, which reduces emissions by around 90% and produces clean-burning hydrogen in the process.

This hydrogen by-product will be used at the Sheldon Station plant, which will be the first large-scale power plant in the US to produce electricity using this method. Monolith Materials have partnered with the Nebraska Public Power District (NPPD) and have decided to reduce emissions by replacing a coal-fired boiler with a hydrogen-fired boiler. Although the hydrogen is not considered renewable energy, as it is derived from natural gas, it is estimated that it will cut Nebraska’s CO2 emissions by around a million tons per year.

The Silicon Valley start-up chose Nebraska as the best location for the plant because of its cheap electric rates, public power partnerships, infrastructure and skilled workforce. NPPD’s Generation Strategy Manager wants to replace more coal with natural gas and make Nebraska “the carbon black capitol of the world.”

Over the past five years, Nebraska has grown by over 52,000 manufacturing jobs. Chief Commercial Officer, Rob Hanson described the company as, “a California company with a development division in Nebraska,” but that “In two years, we’ll be a Nebraska company with R&D in California.”

Energy companies like Monolith Materials are continually finding cleaner ways to produce electricity. Please contact one of Swanson Reed’s offices to find out whether your company is eligible for the federal or state R&D tax credit.

Tax Incentive Changes in Nebraska Legislation

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The Nebraska Advantage Act

A recent report on the business tax incentive programs in Nebraska suggest that in the past eight years, the program has not been as effective as desired in attracting new business to the state. According to the recorded growth, only nine new companies were established in Nebraska over an eight year time period.

Each of these new jobs created within the state cost the local governments and state between $24,500 to $320,000 with the Nebraska Advantage Act. However, this among other incentives, encouraged 69 business to add positions between 2006 and 2014.

This variation of results has spurred a discussion of overlapping incentives and receiving incentives from multiple states.  

Quality Over Quantity 

The report stated that of the 78 business studied, 75% had benefited from additional programs. These programs included customized job training, state-supported internships and research and development tax credits (R&D).

Renee Fry was quoted saying, “We hope that lawmakers will conduct a broader examination of exemptions and incentives to see if their benefits justify their cost, as it is vital to ensure state tax dollars are used as efficiently as possible.”

While the research and development tax incentive does not seem to be at risk as the report mainly focuses on the Nebraska Advantage Act, the incentive program is named as one of the overlapping incentives.

If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.