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Tech groups laud R&D tax credit extension in 'fiscal cliff' deal
Technology trade groups that represent Google, Microsoft and Cisco lauded the research and development (R&D) tax credit extension included in the final "fiscal cliff" deal approved by the House late Tuesday.
The Information Technology Industry Council (ITI) and the Telecommunications Industry Association (TIA) said the R&D tax credit is key to maintaining the United States's position as a leader in the global tech industry. The credit was retroactively extended until the end of 2013 in the approved "fiscal cliff" legislation. It expired at the end of 2011.
“The R&D credit has been, and will remain, a cost-effective policy for increasing research activity and producing a dollar-for-dollar increase in research spending," TIA President Grant Seiffert said in a statement.
In a letter sent to House leaders last month, TIA urged Congress to extend the R&D tax credit in its resolution to the so-called fiscal cliff and said that failure to do so "will cause the private sector to immediately drop or scale back research plans, dealing a devastating blow to U.S. competitiveness."
"Extending the U.S. R&D tax incentive through 2013 provides a strong signal to our economic competitors that the United States is serious about maintaining our global leadership in innovation," Hoffman added.
Tech companies have long supported efforts to make the tax credit permanent.
“Renewing the R&D tax credit retroactively is one essential cornerstone to a robust innovation policy, but continued investment in R&D and certainty on fiscal issues such as tax policy are fundamental to keeping our nation's technology sector at the forefront of the competitive global innovation economy,” said Kevin Richards, senior vice president of federal government affairs at TechAmerica, said in a statement.
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