The General Assembly Raised Bill No. 5319 proposes the establishment of a research and development tax credit specifically for qualified small businesses in Connecticut, effective for taxable years commencing on or after January 1, 2026. The bill defines "research and development expenses" in accordance with the Internal Revenue Code and outlines that these expenses must be incurred within the state and not funded by external grants or contracts. A "qualified small business" is defined as a partnership or S corporation with gross income not exceeding seventy million dollars, and the bill also introduces the term "biotechnology business" to describe small businesses engaged in specific biotechnological applications.

Under the bill, the Department of Economic and Community Development will administer a system of tax credit vouchers, allowing qualified small businesses to earn a credit equal to six percent of their research and development expenses, contingent upon receiving a tax credit voucher. The bill sets a cap of one million five hundred thousand dollars on the credits a business can reserve in a taxable year, with an aggregate limit of twenty-five million dollars for all businesses. Additionally, it allows for the credit to be claimed by shareholders or partners of S corporations and partnerships, and provides a mechanism for taxpayers to exchange excess credits for refunds at specified rates. The commissioner is also empowered to adopt regulations to implement these provisions.