A bipartisan group of lawmakers has introduced a bill that would make permanent a research-and-development tax credit, a proposal for which the technology industry is lining up its support.
Introduced by Rep. Kevin Brady (R-Texas), the bill boasts a bipartisan mix of co-sponsors, including Silicon Valley Democrat Anna Eshoo (D-Calif.), Doris Matsui (D-Calif.), John Larson (D-Conn.), Erik Paulsen (R-Minn.) and Michael McCaul (R-Texas).
Not only would the American Research and Competitiveness Act make the tax credit permanent, it would increase the amount companies can write off for such investments, from 14 percent to 20 percent, The Hill reported.
The R&D credit is approved by Congress on a temporary basis, although the label “temporary” is somewhat misleading as Congress has done so in some form since 1981, The New York Times reported.
However, the temporary nature of the credit has long been a point of contention for those in the tech business.
“The on-again, off-again nature of the current credit doesn’t allow companies the opportunity to do the long-term planning necessary to take full advantage of the credit,” said TechAmerica CEO Phil Bond. “A permanent credit will better ensure a more robust economic recovery and spur high-tech job creation.”
Bond also touted the economic benefit of an expanded, permanent credit.
“The technology industry has long held that a stronger, permanent R&D credit quite simply equals more American jobs,” Bond said.
Obama made a pitch for a permanent R&D extension in the fall, as part of a suite of business-friendly policy proposals he unveiled ahead of the mid-term election. At the time, the cost was estimated to be about $100 billion, The New York Times reported.
But, with the president’s focus increasingly on spurring innovation to “win the future” and a bevy of tech giants, including HP, lining up behind the current proposal, the costly measure may yet stand a chance of passage even as government cost-cutters take the shears to other proposals.