AN ACT CONCERNING A RESEARCH AND DEVELOPMENT TAX CREDIT FOR SMALL BUSINESSES.

HB 5319 creates a 6% state tax credit for qualified small businesses based on their eligible research and development (R&D) expenses, directly affecting S corporations, partnerships, and single-member LLCs with gross income under $70 million. Businesses must apply for a pre-approved "tax credit voucher" to reserve credit capacity (capped at $1.5 million per business and $25 million total annually) before incurring expenses. The credit reduces state tax liability, and any excess can be partially refunded (90% for biotech businesses, 65% for others). This policy aims to incentivize R&D investment by making tax credits accessible without upfront cash costs.