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California Bill Would Provide Small Businesses With Cash Grant For Unused R&D Tax Credits

AB 437, sponsored by California Assembly Speaker Toni Atkins, would provide businesses with less than $5 million in gross receipts to receive a cash grant for between 10 and 15 percent of any unused R&D tax credits.

According to the Sacramento Business Journal:

Under the existing California Research Tax Credit, businesses can reduce their taxes through if they incur certain types of research-related expenses. However, data from the Franchise Tax Board show a majority of the tax credits available to small businesses go unused because the business does not have enough taxable liabilities.

Assembly Bill 437 would allow businesses with revenues of $5 million or less to cash out 10 percent of all R&D tax credits received in 2014 and 2015, and reinvest the money into research and development. Beginning in 2016, businesses would be able to cash out 15 percent of their tax credits.

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