Finance Committee Keeps R&D Tax Credit Carryforward

Responding to concerns from the state’s research and development sector, the Finance Committee this week deleted a provision in SB 1055  that would have significantly cut the carryforward period for R&D tax credits.

The bill, which contains a number of other provisions, was approved by the committee after the deletion.

Connecticut’s R&D tax credit has proved one of the most successful drivers of economic activity and job growth. As the state’s primary tax policy for fostering innovation, it helps keep businesses anchored to Connecticut by providing them with the long-term conditions they need to develop and bring new products to market.

Three of Connecticut’s biggest industries—aerospace, defense and pharmaceuticals—depend on the R&D tax credit to carry them through what is usually a very lengthy process from innovation to production.   

In a recent presentation to state lawmakers, one aerospace company explained that the R&D phase for one of their new products lasted for 20 years, during which they invested more than $1 billion in the product that is just now reaching the production stage.

CBIA and the state’s business community appreciate the unanimous vote of the Finance Committee to avoid an action that would have impaired Connecticut’s economic development efforts.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.