Novo Nordisk Denied Increased California Research Tax Credits

Novo Nordisk Inc. owes California more than $650,000 in additional franchise taxes because it improperly excluded certain research expenses of a former affiliate when calculating state research credits, a state tribunal ruled.

The former affiliate didn’t offload a viable business to Aradigm Corp. because it didn’t pass along all of the assets required to operate the business of developing an inhaled insulin product, the California Office of Tax Appeals ruled in an opinion posted Monday.

That means no adjustment is warranted to exclude the affiliate’s 2008 qualified research expenses from Novo Nordisk’s credit calculations, Administrative Law Judge Asaf Kletter wrote ...