U.S. Sens. Todd Young (R-IN) and Rob Portman (R-OH) this week cosponsored a bipartisan bill that would amend current law to enhance tax benefits for research and development (R&D) activities undertaken by innovative small businesses and startups.
“Now, more than ever, we must find bipartisan solutions to stimulate our economy, get Americans back to work, and ensure we maintain our position on the world stage as the leader in scientific and technological innovation,” Sen. Young said on March 16.
Sen. Young and Sen. Portman introduced the American Innovation and Jobs Act, S. 749, with bill sponsor Maggie Hassan (D-NH) and other members of the U.S. Senate Finance Committee.
If enacted, S. 749 would allow companies and startups investing in R&D to either claim a tax credit or deduct their investments, according to a bill summary provided by the senators, and would double and then further raise the cap over time for the refundable R&D tax credit for small businesses and startups.
S. 749 also would reverse a change in the 2017 tax law to ensure that companies could continue to fully deduct R&D investments each year, the summary says.
“Reversing the change to allow full expensing instead of amortizing R&D expenses over five years will help ensure the U.S. remains the world leader in technological advancement,” Sen. Portman said. “This legislation also expands the R&D credit for small businesses and start-ups, which are often the drivers of new breakthroughs and ideas. This credit comes at a crucial time while our economy is rebuilding from COVID-19.”
The bill, which received endorsements from the National Association of Manufacturers and the R&D Coalition, has been referred for consideration to the U.S. Senate Finance Committee.
“The American Innovation and Jobs Act would incentivize job-creating R&D activity in the United States, particularly among start-ups, to help our country emerge from the disastrous economic impact of the pandemic,” said Sen. Young. “I hope to work with my Senate colleagues on both sides of the aisle to pass this important legislation this year.”