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Medtronic and business groups urge passage of HB 7,008 to extend R&D tax credits to pass‑through entities
Summary
Medtronic and Connecticut Business & Industry Association told the Commerce Committee HB 7,008 would correct an inconsistency that prevents pass‑through entities from accessing state R&D tax credits, potentially boosting in‑state research investment and jobs.
Medtronic and business trade groups testified in favor of House Bill 7,008 in the Commerce Committee hearing on Wednesday, urging the legislature to allow pass‑through entities to claim Connecticut’s research and development (R&D) tax credit.
"Medtronic strongly supports HB 7,008," Jeffrey Becker, who leads Medtronic’s state government affairs team in the Eastern United States, told the committee. Becker said Medtronic employs "nearly 3,000 people in Connecticut and invest[s] over $350,000,000 in the state's many businesses," and that those investments "in turn create another 2,000 jobs." He said HB 7,008 would correct a current disparity under which pass‑through entities (such as partnerships) cannot claim the R&D tax credit while corporations can.
Paul Amarone, public policy associate and advocacy manager at the Connecticut Business and Industry Association, also spoke in support of HB 7,008. Amarone described the proposed change as an expansion of an existing credit equal to up to about 6% of qualified R&D expenses and said extending the credit to pass‑through entities would help small businesses offset hiring and equipment costs needed to expand research activities.
Becker and Amarone cited a Connecticut example where a pass‑through partner (identified in testimony as Covidien) incurred sizable qualified research spending that cannot currently be claimed under state rules because of its entity structure. Committee members asked clarifying questions about entity structure and whether partnerships would be treated as pass‑throughs for the credit; witnesses explained that corporations can claim the credit today while certain partnerships and pass‑throughs cannot.
Committee members raised procedural questions and noted the Department of Economic and Community Development has referenced the governor’s budget for bio R&D funding. No vote was held in the hearing; committee members said they would continue discussion with DECD and other stakeholders.
