Connecticut House Bill HB05490

Connecticut 2020 Regular Session

• Introduced: 3/9/20
• Refer: 3/9/20

Caption

An Act Concerning Research And Development Tax Credits.

Impact

If enacted, HB 05490 will modify existing tax statutes to streamline the process for businesses to access these tax credits. A significant aspect of the bill is that it mandates the Commissioner of Economic and Community Development to assess each application through an econometric analysis. This analysis will ensure that only those projects that promise to generate adequate state revenue will be granted approval for credit utilization, thereby aligning incentives with fiscal outcomes for the state.

Summary

House Bill 05490 proposes to enhance the research and development tax credits offered to businesses within the state. Specifically, it allows businesses to apply accumulated tax credits—credits that have not been utilized through the last completed income year—against state tax imposed under specific chapters in exchange for engaging in capital projects or human capital investments. The bill outlines that businesses must submit detailed applications for approval, demonstrating that their proposed projects will generate state revenue exceeding the accumulated credits.

Contention

Notable discussions surrounding HB 05490 revolve around the implications of expanding tax credits, especially to pass-through entities. The bill includes a mandate for a study to perform a cost-benefit analysis on this expansion, raising debate on whether such inclusions would genuinely stimulate economic growth or if it could lead to unforeseen state revenue deficits. Proponents argue that elevating access to tax credits will encourage innovation and expansion, while critics caution against overestimating the economic returns that such investments might generate.