Bill would make R&D tax credit permanent

The tech industry is backing a bipartisan bill introduced in the House Tuesday that would make the research and development tax credit permanent.

"R&D is the critical lifeblood of our industry," said Doug Cronin, vice president of corporate tax at Boston Scientific.

"The R&D tax credit enables American companies like Boston Scientific to develop breakthrough treatments for patients while also creating quality jobs that fuel economic growth. Innovation in America is the key to rebuilding our economy and strong investment in R&D is a vital component of that success."

The American Research and Competitiveness Act would increase the amount companies can recoup for investing in research and development from 14 percent to 20 percent while making the program permanent.

Rep. Kevin Brady (R-Texas) introduced the bill with co-sponsors Anna Eshoo (D-Calif.), Doris Matsui (D-Calif.), John Larson (D-Conn.), Erik Paulsen (R-Minn.) and Michael McCaul (R-Texas), noting the U.S. is currently ranked 24th out of 38 developed nations in R & D incentives.

“To keep from falling behind our global competitors and to make sure America is the first choice for R&D jobs we need to modernize the tax credit, strengthen it to encourage companies to make greater investment in research and jobs and make the credit permanent so businesses have the confidence to make long-term investment decisions here in the United States,” Brady said.

TechAmerica President and CEO Phil Bond said in a statement that current procedure of extending the credit on a temporary basis creates uncertainty and limits the amount firms are willing to invest in R&D. The group claims over 70 percent of the credit's benefits go to the salaries of American workers.

“The technology industry has long held that a stronger, permanent R&D credit quite simply equals more American jobs," Bond said.

"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. A permanent credit will better ensure a more robust economic recovery and spur high-tech job creation.”

Eshoo, whose district includes Silicon Valley, has been one of the strongest proponents of making the credit permanent. Last February she joined 120 lawmakers from both parties in pushing for its expansion.

“The R&D tax credit is a proven policy which encourages businesses to invest in new technologies that create jobs and shape tomorrow’s economy. For decades it has been essential for out-innovating and out-competing the rest of the world, but now other countries have caught up,” Eshoo said.