Senate approves bill that would study expanding R&D tax credit to small businesses

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The state Senate has passed a bill that requires several state agencies to study the impact of expanding research and development tax credits to small businesses.

The bill, Senate Bill 351, would direct the state’s Department of Economic and Community Development, in consultation with the state’s Department of Fiscal Services, to investigate the possibility of extending tax credits. R&D tax to flow-through entities, including limited liability companies, sole proprietorships and S-corporations.

The bill is now returned to the House for further consideration. The legislative session ends on May 4.

According to State Senator Joan Hartley (D-Waterbury), co-chair of the Commerce Committee, the bill received support from groups including ManufactureCT, the Connecticut Business & Industry Association’s Bioscience Growth Council and Greater New Haven & Quinnipiac Chambers of Commerce.

These groups testified that extending tax credits would help support the growth of small state manufacturers who may not have the capital or labor to invest in R&D initiatives.

Connecticut R&D tax credits range from 1% to 6% of a company’s total R&D investment in a given year. Businesses can claim these credits against their state income tax, or if the value of the credits exceeds their tax liability, they can carry the credits forward to future tax years, while small businesses can resell them. to the State at 65% of their value.


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