Three new bills recently introduced by U.S. Rep. Vern Buchanan (R-FL) would expand tax incentives to spur innovation that could lead to new cures and treatments for Americans.
“As we work to recover from a devastating global pandemic and an overstimulated economy, American businesses are met with runaway inflation and a volatile job market,” said Buchanan, the Republican Leader on the U.S. House Ways and Means Health Subcommittee. “In this environment, Congress needs to focus on making it easier for businesses to do what they do best – creating jobs, innovating, and investing capital back into our communities.”
Rep. Buchanan reintroduced the American Innovation Act of 2022, H.R. 7503, a bill that would eliminate some of the barriers to starting businesses, such as new drug companies, by providing special tax treatment for start-up costs and preserving research and development (R&D) tax credits.
According to a bill summary provided by the congressman’s office, H.R. 7503 would quadruple the amount of start-up costs small business owners can deduct from their federal income taxes, raising it from $5,000 to $20,000. The bill would also increase the threshold for deductions from $50,000 to $120,000 for certain start-up expenditures.
The bill previously passed the U.S. House in 2018 with bipartisan support.
Rep. Buchanan also introduced the Start-ups for Cures Act, H.R. 7504, and the More Cures Act, H.R. 7505, which would strengthen the U.S. medical supply chain.
“From the early days of the COVID pandemic it became clear how dangerously reliant we are on China and the global supply chain for critical lifesaving treatments and cures,” Rep. Buchanan said. “The Start-ups for Cures Act and the More Cures Act will help spur American innovation and place our country back at the top of the global leaderboard for developing new cures.”
The Start-ups for Cures Act creates a refundable tax credit for small biotech companies focused on infectious disease drug development. Businesses would be eligible for the refundable tax credit if their gross receipts total less than $1 million and they are engaged in research that includes developing life-saving drugs and treatments and also research that helps administer those drugs.
The More Cures Act creates a 14 percent bonus R&D tax credit for companies engaged in drug development research, with a focus on new life-saving drugs and materials. It also creates bonus R&D incentives for companies working on infectious disease research.
U.S. Rep. Mike Kelly (R-PA) was the lead original cosponsor of all three bills.