Life Sciences Tax Update: R&D and OBBB Changes

Recent legislative changes affecting research and development incentives, international operations, and business investment have prompted many clients to revisit their tax planning strategies. We recently gathered several resources that may be helpful as you evaluate planning opportunities and compliance requirements.

In particular, we encourage you to review our recent articles covering R&D tax considerations, related federal developments, and planning topics that may affect innovation-focused organizations. Together, they provide practical context on recent changes and considerations for companies investing in research, technology, and growth.

State Conformity and Expiring Provisions

As clients assess the impact of recent tax legislation, it may also be helpful to revisit how individual states conform to federal tax changes, particularly as they relate to R&D credits, treatment of newly incurred research and development expenditures, and previously capitalized R&D costs. State treatment can vary, and differences in conformity may affect the timing and extent of tax benefits available to companies investing heavily in innovation. In addition, several recently enacted provisions have defined expiration dates, making it important to consider not only current opportunities but also how future investments, commercialization efforts, and long-term tax planning may be affected as those provisions phase out. Organizations evaluating growth initiatives may benefit from considering both federal and state implications as part of a broader financial strategy.

Life Sciences Tax Resources and Related Articles:

• What Life Sciences Companies Get Wrong When Building Cross-Border R&D Structures
• Essential Financial Strategies for Life Sciences Companies Seeking Strategic Exit
• Positive Changes for RE Tax Deductions Under OBBB
• Life Sciences Gain R&D Tax Relief Under OBBB
• What Life Science Firms Need to Know Before Expanding to the U.S.
• Megabill Provisions Raise Tax Exposure for Multinationals
• Tax Strategies Shaping Life Science Innovation

Putting This Into Practice: Life Sciences Tax Strategy

AAFCPAs serves life science companies throughout the business lifecycle, from startup formation and capital acquisition through growth, transaction readiness, and exit. Drawing on the experience of tax professionals, advisors, outsourced accounting specialists, fractional CFOs, and transaction professionals, we help organizations navigate the financial, operational, and regulatory considerations that accompany innovation. Our team works with emerging and growth-stage pharmaceutical, biotechnology, and medical device companies on matters ranging from R&D tax planning and cross-border operations to financial reporting, cash runway management, investor readiness, and strategic transactions.

These insights were contributed by Bella Amigud, CPA, MST, Tax Partner, Richard Weiner, CPA, MST, CM&AA, Tax Partner, and Anthony Dello Stritto, CPA, MST, Tax Director.

Questions? Reach out to our authors directly or your AAFCPAs partner.

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