IEEE-USA urges Congress to permanently extend R&D tax credit

IEEE-USA urges Congress to make the research and development (R&D) tax credit permanent. The White House made the proposal today.

"Making the R&D tax credit permanent would provide corporations some needed economic predictability in these turbulent times," IEEE-USA President Evelyn Hirt said. "The credit reduces the monetary risk of investing in research that might not result in profitable products and systems for many years. The technologies U.S. companies develop or improve will ultimately have a positive effect on U.S. competitiveness, the growth of small businesses and job creation."

The R&D tax credit reduces a company's federal tax liability based on the money it spends researching and developing new products or improving existing ones. Credit can be taken for such things as salaries and wages, contract research (65 percent), supplies and patent attorney fees.

The R&D tax credit -- officially known as the Research and Experimentation tax credit -- was created by Congress in 1981 as a temporary measure. It has lapsed on several occasions and been extended 13 times. The most recent credit expired in December, causing unease among companies about whether they should continue current levels of R&D investment. Making the credit permanent would provide a level of certainty to businesses that money they invest in R&D will receive the credit.

IEEE-USA has supported permanent extension of the tax credit for many years. It reconfirmed its support in June with a position that reads, in part, "By providing an incentive for expanding private-sector investments in technology, the R&D tax credit improves productivity and encourages technological innovations that help sustain U.S. competitiveness, create jobs and ensure our national security." See http://www.ieeeusa.org/policy/positions/RDTaxCredit0610.pdf.

Provided by IEEE-USA