Boston Globe: Mass. would score big wins in bipartisan federal tax legislation

Feb 02, 2024

By Jim Puzzanghera and Tal Kopan, Boston Globe Staff

The following is an excerpt from a Boston Globe article originally published on February 1, 2024.

The bill temporarily restores business breaks that were part of the 2017 tax law enacted under Donald Trump that have expired or are being phased out. Through their 2025 tax returns, businesses again would be allowed to deduct the full cost of research and development expenditures in the same year they are made instead of having to spread that deduction over five years.

Businesses also would be able once again to deduct the full cost of investments in new equipment, machinery and technology through the 2025 tax year. Without the legislation, that deduction is set to start phasing out, dropping to 80 percent on 2023 tax returns and ultimately eliminated in 2027.

Those tax breaks are crucial to Massachusetts biotech companies, particularly small ones that aren’t yet turning a profit, said Ed Coppinger, head of government affairs at MassBio, a trade group representing the state’s life sciences industry.

“The success rate is so low on these companies already because it’s cutting edge … and if the money that they’ve raised for research and development, to take their innovation to the next level, the next phase of drug research, has to be used for a tax liability, it will significantly impact these small companies,” he said. “If you’re working on the first innovation, that first drug, that can take 10 to 12 years or longer. If you can’t get that write-off, you’re just going to run out of money.”

Read the full story at BostonGlobe.com.

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