California Gov. Gavin Newsom signed legislation on February 9, 2022 that would reinstate two important tax provisions for biotech companies large and small—a win for biotech innovation and future cures.
Senate Bill 113 provides $1.6 billion in relief for small businesses. Specifically, the bill reinstates the Research and Development Tax Credit and the Net Operating Loss (NOL) Tax Deduction, which were frozen in 2020.
The R&D tax credit and NOL deduction help many biotech companies with research operations in California defray R&D costs and provide an incentive to invest in smaller start-up companies that are not yet profitable.
Senate Bill 114, also signed into law, extends COVID-19 paid sick leave through September 30, 2022.
Brian Warren, BIO’s Director of State Government Affairs, Western Region, said that BIO, along with its in-state partner California Life Sciences, worked diligently over the past two years to reinstate these key tax programs by meeting with legislators and the Newsom Administration to explain the significance of these programs in keeping California at the forefront of biotechnology innovation.
Warren said the reinstatement of these tax programs will keep California at the forefront of biotechnology innovation.
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