New Hampshire Businesses Celebrate Newly Raised Cap on Research and Development Tax Credit

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New Hampshire businesses are now able to claim up to three times the amount in the state’s research and development (R&D) tax credit. The cap for claims has been raised from $2 million to $7 million, effective July 1.

Although local governor, Chris Sununu, thanked the “Republican leadership of the Legislature” for the increase, the  change was in the works long before the current Legislature. 2015 governor Maggie Hassan originally vetoed the budget, stating it was unbalanced due to corporate tax cuts. Eventually, Hassan stood behind the budget with the caveat of having business tax rate cuts aligned with New Hampshire’s fiscal health. Nothing, however, was mentioned regarding the R&D tax credit.

The R&D tax credit helps to strength the economy of small businesses, especially those involved in high-tech. Created in 2008, the state R&D tax credit was originally capped at $1 million. In New Hampshire, 71 businesses applied for the credit during its first year. Following this, the credit cap was lifted to $2 million in 2013, and 155 businesses applied for the credit. It is estimated that this number will grow in the current year, especially with the current credit cap of $7 million.

Businesses are allowed to claim credit for 10% of their research and development costs, to a maximum of $50,000. Interestingly, this maximum has never been reached as the demand for the credit has always been greater than the supply.

Is your business involved in innovative projects relating to research and development of new products or processes? You may qualify for the R&D tax credit. To learn more about the federal and state R&D tax credit incentive program, contact a Swanson Reed Tax Advisor today.

New Hampshire’s High-Tech Industry on The Rise With $7 Million In R&D Tax Credits

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New Hampshire Governor Chris Sununu has issued a statement saying that $700 million will be given out to 200 New Hampshire businesses in 2017, meeting 92.4% of the total requested dollar amount for each company. This wasn’t all done by the Governor, but with the help of the Republican leadership and the Legislature, as well as the Senator Jeb Bradley who increased the Research and Development (R&D) tax credit from $2 million in 2008 to $7 million in 2017.

The reason for increasing the R&D Tax Credit for New Hampshire is the small economy of this area. Although most businesses are SMEs, they are high-tech focused and would benefit greatly from the increased R&D credits.

Governor Chris Sununu believes that the change in the R&D Tax Credit will send out a message that New Hampshire is now “open for business.” He is hoping that this change will promote a business-friendly environment that will spark company growth and job creation, thereby benefiting everyone.

The New Hampshire Legislature enacted an R&D tax credit in 2007 for businesses that paid taxes to the state of New Hampshire. In 2007 the Legislature designated $1,000,000 to be available for the next five fiscal years. In 2013 that was changed and a new Bill was passed changing the amount to $2,000,000, which was subsequently increased to $7,000,000 in 2015 (effective as of July of 2017).

Sununu believes that R&D is key to driving the future investment of businesses in New Hampshire. If you would like to find out how your business could benefit from R&D tax credits, contact a Swanson Reed R&D Tax Advisor today.