State lawmakers adopted a number of proposals designed to support innovation and the growth of Connecticut’s manufacturers.
The state’s Manufacturing Reinvestment Account (MRA) program got a facelift to attract more employers to the program (SB 232). As updated, the program will increase from 50% to 100% the exemption from the corporate and personal income tax for any eligible withdrawal from an MRA account.
In addition, to help control state finances, the revised program caps the number of employers that can participate at 50, but expands from 50 to 150 the number of employees an eligible employer may have.
The legislature also approved $30 million for the Connecticut Manufacturing Innovation Fund (SB 29) to help manufacturers with equipment, research and development, and training. The fund also may encourage university research efforts, create a voucher program to assist with technical needs, and help attract new manufacturers to the state.
The Governor first proposed the fund and advisory council in HB 5041, and it is a positive step toward supporting Connecticut’s manufacturing industry and its growth in the state.
Of that $30 million, $5 million is earmarked for the Connecticut Center for Advanced Technology (CCAT) for research and development of advanced composite materials machining.
A new Connecticut Manufacturing Innovation Advisory Board will review and approve expenditures from the fund. Financial assistance will be awarded to supply chains and related areas of aerospace, medical device, composite materials, digital manufacturing and other technologically advanced commercial products and services.
Certain areas in the state will be given priority for such funding including distressed municipalities, targeted or public investment communities, enterprise zones and manufacturing innovation districts.
Apprenticeship and R&D Tax Credits
Manufacturers need a strong pipeline of skilled talent to meet their growing workforce needs. In response, the budget implementer (HB 5597) expands one of the most effective pipelines—apprenticeships—available to develop manufacturing talent.
However, lawmakers chose not to extend the research and development tax credit to pass-through entities because of the state’s fiscal situation.