The General Assembly Raised Bill No. 7008 proposes a new tax credit for research and development expenses incurred by pass-through entities, effective January 1, 2026. The bill allows a credit equal to six percent of the research and development expenses paid or incurred during the taxable year, applicable to taxpayers under chapter 229 of the general statutes, excluding certain liabilities. The credit can be claimed by shareholders or partners of S corporations or entities treated as partnerships, as well as by owners of single-member limited liability companies that are disregarded as separate entities for tax purposes.

Additionally, the bill sets a cap on the total amount of tax credits that can be issued by the Commissioner of Revenue Services at five million dollars per fiscal year. The Commissioner is also granted the authority to adopt regulations to implement the provisions of this section. The bill aims to incentivize research and development activities among pass-through entities, thereby fostering innovation and economic growth.