Innovation & Jobs Act Needed to Spur Innovation and Strengthen America's Global Competitiveness
Biotechnology companies are hard at work on the cutting-edge innovations we need, but those breakthroughs are at risk from current tax policy. The Biotechnology Innovation Organization, which represents more than 1,000 biotech companies, thanks Senator Maggie Hassan (D-NH), Senator Todd Young (R-IN), and the original cosponsors of the American Innovation and Jobs Act (S. 866) for reintroducing this important legislation. The bill should be enacted quickly to restore the immediate expensing of research and development expenditures and remove what is essentially a tax on innovation.
Developing the next generation of biomedical breakthroughs that patients need, as well as new traits and technologies to strengthen food security and climate resiliency, is expensive and extremely time consuming. For example, it can take over 10 years and more than a billion dollars to bring a new drug to market. Robust investment is the fuel needed to keep the engine of innovation running, and the American Innovation and Jobs Act is needed to keep that fuel flowing.
Unfortunately, the mandatory capitalization of R&D costs, included in the 2017 Tax Cuts and Jobs Act, makes investment in emerging companies more challenging.
The American Innovation and Jobs Act also would prevent an increased tax burden on small, emerging biotech companies that rely on pre-revenue payments from partner companies until they have products on the market. Mandatory amortization places a heavier tax burden on budding innovators that use immediate expensing of R&D costs to offset taxes on these up-front payments needed to keep the lights on.
The U.S. has a long and admirable track record of incentives to keep our nation at the forefront of technological innovation, a record that is now in danger. BIO calls on Congress to swiftly pass the American Innovation and Jobs Act to ensure that today’s tax policy doesn’t put tomorrow’s biotech breakthroughs at risk.
