Senate Passes R&D Credit In Final Version of Housing Bill
WASHINGTON, D.C. (Saturday, July 25, 2008) - Hundreds of biotechnology start-ups will be encouraged to utilize an incentive for capital investments as a result of a provision included in the Housing Bill passed by the U.S. Senate today by a vote of 72-13. The President is expected to sign the bill this week.
“Many biotech companies whose products are not yet on the market will be in a stronger position to carry out clinical trials and product development because of this provision,” said Jim Greenwood, president and CEO of the Biotechnology Industry Organization. “This provision encourages companies to make new investments this year, accelerating the development of new life-saving therapies, and creating new jobs.”
“In championing this provision, Senators Stabenow and Voinovich have advanced the medical options for hundreds of patients who will benefit from access to new biotech therapies,” continued Greenwood.
Bonus depreciation was enacted into law earlier this year and is designed to encourage companies to make capital investments that will help spur economic growth. Yet many companies that do not expect to pay tax this year, in part due to the economic downturn, would receive no benefit regardless of how much they invest.
The provision will provide these companies a limited investment incentive by allowing the companies to utilize accumulated AMT or R&D credits in lieu of the bonus depreciation to which they would otherwise be entitled. Like bonus depreciation, this provision is not a new tax benefit. It simply allows companies to use credits today that they could otherwise use in the future, based on the new capital investments that would have qualified under bonus depreciation.
This provision is supported by a broad range of industries, including: American Airlines, Arena Pharmaceuticals, Inc., the Association for Manufacturing Technology, Arch Coal, BIO, Cleveland Cliffs, CMS Energy, Coal Source, Consol Energy, Ford, Foundation Coal, GM, Goodyear, Jim Walter Resources, Murray Energy, National Mining Association, Northwest Airlines, Owens Illinois, Peabody, and Smurfit Stone.
This bipartisan proposal originally passed as the Voinovich-Stabenow Amendment to the Senate Housing package.
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