Strengthening R&D policy is a key component of BIO’s tax advocacy. We’ve got the details on promising activity on Capitol Hill—and how you can help improve the R&D credit for small businesses.
Beginning in 2022, U.S. businesses may be forced to amortize their R&D expenses over several years, rather than immediately deducting them as they currently can. The U.S. would stand out as one of only two developed countries with such a policy.
On Tuesday, Sens. Todd Young (R-IN), Maggie Hassan (D-NH), Catherine Cortez Masto (D-NV), Rob Portman (R-OH), and Ben Sasse (R-NE) introduced the bipartisan American Innovation and Jobs Act to reverse this policy and allow U.S. businesses to continue to immediately deduct their R&D expenses.
If enacted,the bill would also:
- Double the refundable R&D tax credit
- Expand eligibility to more businesses
This follows similar legislation introduced in February (American Innovation and R&D Competitiveness Act), by Reps. John B. Larson (D-CT), Jimmy Panetta (D-CA), Suzan DelBene (D-WA), Ron Estes (R-KS), Darin LaHood (R-IL), and Jodey Arrington (R-TX).
BIO's take: BIO is pleased to see progress on this important issue and will continue to advocate with its allies for swift passage of this bipartisan, bicameral legislation. Policies that seek to expand U.S. R&D are critical in supporting the biotech industry as we work to solve society’s most pressing challenges. – Cameron Arterton, BIO’s VP of Emerging Companies and Capital Formation
Make the R&D credit work better for pre-revenue biotechs!
There’s still time to take this important survey on the payroll R&D credit—but it closes tomorrow!
Established five years ago, the payroll tax R&D creditallows small companies investing in R&D to take part or all of their R&D credit against their payroll tax liability—a recognition from Congress that income tax credits provide no immediate benefit to pre-revenue biotechs.
But many small biotechs can’t take advantage of the credit due to restrictive eligibility requirements.
BIO has long advocated for improvements to the credit, including expanding access to and increasing the amount of the credit.
BIO has partnered with EY on a study to analyze credit utilization among small companies—click here to take the survey. The survey closes tomorrow, March 19, 2021.
Your participation will be instrumental in supporting our advocacy moving forward. Any information provided will only be viewed by EY and only reported in aggregate.