Connecticut’s Tax Change Aims to Attract Bioscience Startups

Connecticut is making a bold move to attract new bioscience startups with a recent change to its corporate income tax laws. Governor Ned Lamont signed a measure that will give businesses an extra decade to deduct past losses from future profits, extending the carryforward window to 30 years starting next January.

This change is significant for Connecticut, as neighboring states like Massachusetts and New York only offer a 20-year carryforward period. The goal is to make the state more competitive for bioscience firms and other startups that rely on seed money to get off the ground.

Chris Davis, vice president of public policy at the business organization CBIA, emphasized that this change could help keep companies that spin out of prestigious universities like Yale and UConn within state lines. With nearly 26,000 people employed in Connecticut’s bioscience industry, this move could have a positive impact on the state’s economy.

Massachusetts and New York are major hubs for the bioscience industry, with Massachusetts alone employing over 110,000 people in biotechnology and pharmaceuticals. However, Connecticut’s longer carryforward window could make it a more attractive destination for startups looking to establish themselves in the industry.

While some critics argue that such provisions reduce the overall corporate tax base, Connecticut’s move is seen as a step towards creating a more business-friendly environment. Experts believe that while the 30-year carryforward may not be a game-changer, it sends a message that Connecticut is open for business and willing to compete with other states in the region.

Overall, this change in tax policy is expected to have a positive impact on Connecticut’s ability to attract and retain bioscience startups, ultimately boosting the state’s economy and creating more opportunities for growth in the industry.