Newsom Proposes $850 Million Cap on Corporate R&D Tax Credits, Alarming California Biotech
Updated
Updated · CalMatters · Jun 8
Newsom Proposes $850 Million Cap on Corporate R&D Tax Credits, Alarming California Biotech
3 articles · Updated · CalMatters · Jun 8
Summary
Fewer than 100 of California’s largest corporate taxpayers would face a new annual limit on tax credits under Gov. Gavin Newsom’s budget plan, which is projected to raise $850 million in 2026-27.
The proposal would sharply curb the state’s research-and-development credit, a key incentive for biotech, pharmaceutical and medical-device companies that say they rely on it to keep research, facilities and jobs in California.
Biocom and other life-sciences advocates are urging lawmakers to reject the cap, warning companies could shift operations to other states and cut hiring if the credit is reduced.
The fight adds pressure to California’s budget debate by pitting Newsom’s push for more corporate tax revenue against an industry argument that the change could weaken one of the state’s core innovation sectors.