U.S. Rep. Brett Guthrie (R-KY) voted to support the American Research and Competitiveness Act of 2015 last week, which will make the Research and Development (R&D) tax credit a permanent benefit.
“Short-term tax provisions are bad for job creators who are trying to plan ahead,” Gutherie explained. “Making the Research and Development Tax Credit permanent will create stability and ensure we remain competitive with our counterparts abroad.”
The R&D Tax Credit is an important tool for the United States economy. Nations around the globe compete for opportunities for research and development projects, which are backed with lucrative investments. If the tax credit is not in effect, American companies are at a distinct disadvantage.
“This tax credit is an important tool in supporting American research,” Guthrie said. “It is irresponsible to keep extending this critical tax credit when we could make it permanent and strive to be the leader in global innovation.”
R&D is a tax credit for general business under Internal Revenue Code Section 41. It offers a financial benefit for companies that expend funds for research and development within the United States. The R&D Tax Credit was originally presented as part of the Economic Recovery Tax Act of 1981.
Since R&D’s original expiration date at the end of 1985, the credit has expired on eight occasions and been extended 15 times.
The most recent expiration was Dec. 31, 2014. The pending legislation would extend the credit retroactively and permanently.