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HB 7008

AN ACT CONCERNING A RESEARCH AND DEVELOPMENT EXPENSES TAX CREDIT FOR PASS-THROUGH ENTITIES.

2025 Regular Session

HB 7008: An Act Concerning a Research and Development Expenses Tax Credit for Pass-Through Entities OverviewBill Number: HB 7008 Title: AN ACT CONCERNING A RESEARCH AND DEVELOPMEN

FILE NO. 841
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Bill Summary · HB 7008

HB 7008: An Act Concerning a Research and Development Expenses Tax Credit for Pass-Through Entities

Overview

Bill Number: HB 7008
Title: AN ACT CONCERNING A RESEARCH AND DEVELOPMENT EXPENSES TAX CREDIT FOR PASS-THROUGH ENTITIES
Status: FILE NO. 841
Introduced: February 20, 2025

Purpose and Intent

The primary goal of HB 7008 is to extend the existing research and development (R&D) tax credit program to include pass-through business entities, such as partnerships, S corporations, and limited liability companies. Currently, the R&D tax credit is only available to traditional C corporations. This bill aims to provide equitable tax incentives for innovative research and development activities conducted by a broader range of business structures.

Key Provisions

  • Allows pass-through entities to claim the existing R&D tax credit against their state corporation business tax liability
  • Establishes a formula for calculating the credit amount based on qualified R&D expenses incurred by the pass-through entity
  • Requires pass-through entities to allocate the R&D tax credit to their individual owners, partners, or shareholders based on their respective ownership interests
  • Specifies that the R&D tax credit for pass-through entities cannot be carried forward or backward to other tax years

Affected Parties and Impacts

  • Pass-through business entities, including partnerships, S corporations, and limited liability companies, would be able to claim the R&D tax credit, providing them with a new tax incentive for investing in research and development.
  • Individual owners, partners, or shareholders of eligible pass-through entities would receive a proportional share of the R&D tax credit, potentially reducing their overall state tax liability.
  • The Department of Revenue Services would be responsible for administering the expanded R&D tax credit program and processing claims from pass-through entities.

Procedural and Timeline Considerations

HB 7008 was introduced in the state legislature on February 20, 2025 and is currently in the FILE NO. 841 stage. If enacted, the bill would take effect for tax years beginning on or after January 1, 2026, allowing pass-through entities to claim the R&D tax credit starting with the 2026 tax year.

Compiled from official sources — confirm details with the bill’s official record.

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