Jobs Bill May Include R&D Tax Credit Extension
A draft being circulated this week of the jobs bill Senate Democrats are crafting includes a one-year extension of the research and development tax credit. The provision in the bill would be retroactive, covering research activities that took place after the credit expired on Dec. 31.
The credit expired after the Senate failed to act on legislation in December that would extend the R&D credit and other business tax breaks for a year. Technology industry groups have been pleading with congressional leaders for years to pass a permanent extension of the R&D tax credit, saying it would provide companies with the certainty they need to invest in long-term research projects in the United States. At the same time, they say the credit needs to be enhanced to better compete with R&D incentives offered by other countries.
"Now that Congress has once again allowed the credit to expire, more than 100,000 good paying jobs are at risk," TechAmerica President and CEO Phil Bond said last month. "It should be stronger and permanent if we are to remain competitive globally, but at a minimum, an extension has wide-spread bipartisan support."
In its proposed fiscal year 2011 budget, the Obama administration has called for making the R&D credit permanent. During a budget briefing earlier this month, White House Office of Science and Technology Policy Director John Holdren said a permanent extension of the credit "will give U.S. companies an important incentive to keep investing in American innovation."
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