Bipartisan legislation cosponsored by U.S. Rep. Darin LaHood (R-IL) would ensure that the United States maintains global innovation leadership by restoring the deduction for research and development (R&D) expenditures.
“This bipartisan bill will provide relief and incentives that will spur job creation throughout Illinois and our country,” the congressman said last week, noting that immediate R&D expensing incentivizes long-term investments in innovation and technological breakthroughs by providing businesses an opportunity to deduct R&D activities in the tax year that they occur.
Rep. LaHood on Feb. 24 introduced the American Innovation and R&D Competitiveness Act, H.R. 1304, with bill sponsor U.S. Rep. John Larson (D-CT) to amend the U.S. Tax Code that requires amortization of R&D expensing over five years beginning in 2022.
Rep. Larson explained that due to a provision in the Tax Cuts and Jobs Act, businesses will have to amortize R&D expensing over a five-year period beginning in 2022. If enacted, H.R. 1304 would repeal this provision, “which will ensure that the R&D tax credit, along with the ability to deduct R&D expenses, remains an effective engine for American innovation,” he said.
“Innovation is a key engine to the American economy. As Illinois and our country reopen, investing in research and development will be a critical component to putting businesses of all sizes in a position to succeed,” Rep. LaHood said.