House Tax Writers Approve Permanent R&D Incentive

By February 12, 2015Taxation

Under the leadership of new Chairman Paul Ryan, the House Ways and Means Committee voted to advance legislation to strengthen and make permanent the R&D tax credit.

Introduced by Reps. Kevin Brady (R-TX) and John Larson (D-CT), H.R. 880 would finally end the on-again, off-again nature of the R&D credit by making it a permanent part of the tax code, retroactive to December 31, 2014, when the credit expired. The bill would also strengthen the credit by increasing the easier-to-use alternative simplified credit from 14 percent to 20 percent. These enhancements are expected to boost private research spending by $11 billion and increase research-related employment by 300,000 in the long term.

In order to make it easier for small businesses to take advantage of the credit, H.R. 880 allows eligible companies to use R&D credits to offset both their regular tax and any AMT liability. For startup businesses, the bill increases from 6 percent to 10 percent the credit for those thesis writing service that do not have research expenses in the past three years that generally are needed to calculate eligibility for the full credit. Please see a full summary of the bill here.

Before the vote, the R&D Credit Coalition sent Ways and Means Committee members a letter urging them to support the bill. While making the R&D credit permanent has strong bipartisan support at, Democrats on the committee voted against H.R. 880 due to concerns that the $181 billion cost (over ten years) of the bill is not directly offset. In reality, the R&D credit has already paid for itself multiple times over with the research produced and benefits to the economy that have resulted from its existence since first enacted in 1981.

Since manufacturers produce three quarters of private sector research lab report writing, H.R. 880 is truly a pro-manufacturing effort. The NAM urges both Republicans and Democrats to vote YES on strengthening the R&D credit and making it permanent when it comes to a vote in the House.

Christina Crooks

Christina Crooks is Director, Tax Policy for the National Association of Manufacturers, where she is responsible for providing NAM members with important updates on tax policy, pensions, and corporate finance and management issues and representing the NAM’s position on these issues before Congress and the Administration. Within the NAM tax policy portfolio, Christina focuses on the R&D tax credit and tax extenders, and serves as the Executive Secretary for the R&D Credit Coalition and a leader in the Broad Tax Extenders Coalition.

Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.

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