Inflation Reduction Act: 4 strategies for life sciences companies

4/13/2023
Inflation Reduction Act: 4 strategies for life sciences companies

Crowe tax specialists offer four key takeaways about the Inflation Reduction Act.

The sweeping Inflation Reduction Act of 2022 affects nearly every U.S. industry, and life sciences is certainly no exception. But tax executives in life sciences might not be aware of the potential benefits of the act.

Life sciences companies might be able to tap into these benefits, so it’s important for them to understand the implications – and possible opportunities – of key provisions of the act.

As shared on our recent webinar, “Inflation Reduction Act of 2022: Tax Impact on Life Sciences Companies,” here are four key takeaways for further consideration for tax executives:

Stay up to date on life sciences insights
Sign up to receive timely updates, insights, news, and events.
Assess the impact the revenue-raising provisions of the Inflation Reduction Act could have on your company

1. Assess the impact the revenue-raising provisions of the Inflation Reduction Act could have on your company.

The act includes hundreds of billions of dollars' worth of revenue raisers. The first step is determining what the various revenue raisers are and what they mean for life sciences companies like yours.
Determine if the energy incentives in the Inflation Reduction Act for energy investments apply to your business

2. Determine if the incentives in the Inflation Reduction Act for energy investments apply to your business.

After determining what applies, companies can use that information to take part in strategic discussions. If your life sciences company wants to reduce its carbon footprint and explore new sources of cash flow, looking into these incentives could be a great move.
Evaluate whether you can benefit from the new tax credit monetization rules in the Inflation Reduction Act

3. Evaluate whether you can benefit from the new tax credit monetization rules in the Inflation Reduction Act.

Your life sciences company might have previously had a large net operating loss that prevented thinking about tax planning in this way. But now that you can transfer these credits to a third party and monetize them, it could be a game-changer.
Inflation Reduction Act of 2022 Takeaway 4

4. Make sure tax is included in your company’s ESG strategic discussions.

The Inflation Reduction Act is a major “carrot” in support of environmental, social, and governance (ESG) and sustainability efforts – and it’s one that includes a number of new and expanded incentives related to clean and renewable energy. Your life sciences company’s tax function might be able to deliver a great deal of value by discounting capital expenditures toward sustainability initiatives.

How can your life sciences company benefit from the IRA?

Don’t miss out on potential tax advantages included in the IRA. Our specialists can help you figure out the intricacies of provisions that matter for your business. Connect with us to find out more about how we can work with you.
David Strong
David Strong
Partner, Washington National Tax
Devin Hall
Devin Hall
Managing Partner, Energy
Victor Sturgis
Victor Sturgis
Partner, Tax