June 15, 2018

Malloy reluctantly signs tax break for bioscience investors

PHOTO | Contributed
PHOTO | Contributed
New Haven-based Achillion Pharmaceuticals researcher Jennifer Chu.

With reluctance, Gov. Dannel P. Malloy on Thursday inked legislation that provides a tax break for bioscience investors.

Malloy announced Thursday he signed, with "caution," Senate Bill 266, which provides a tax deduction for income generated by investments in eligible Connecticut-based bioscience businesses.

Investments made in Connecticut's bioscience sector on or after Jan. 1 this year are eligible for the tax break.

According to the bill, the loss in revenue is expected to be "minimal" through 2020 under the "limited" exemption. The revenue shortage is projected to grow in 2021 and beyond to approximately $250,000 by 2026.

The measure was unanimously approved by the Senate and overwhelmingly backed by the House and two legislative committees.

Asserting his support for the bioscience sector, the governor still warned the General Assembly that offering tax deductions to investors could erode Connecticut's "unpredictable" income tax revenue and jeopardize funding of state programs.

"We have much more effective ways to promote investment and growth in this sector," citing recent job creation, and expansion efforts at Farmington's Jackson Laboratory for Genomic Medicine and Stamford-based genomic testing firm Sema4.

Malloy said it is incumbent for lawmakers to request the state's "most fortunate" to pay their "fair share." The governor added it is unclear how much revenue the state will lose from this measure.

"I am signing this legislation because the General Assembly believes this deduction can be a necessary tool to luring a new industry of bioscience venture capitalists to Connecticut," he said.

The governor urged the caucus to implement limits on the tax deductions during special session.

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