Archive: April 2008

Congress May Extend and Modify R&D Tax Credit

The Senate Finance Committee recently issued a news release that proposes to extend and modify the R&D tax credit. The summary is as follows:

Research and Development Credit. The law provides a research tax credit equal to 20 percent of the amount by which a taxpayer’s qualified research expenses for a taxable year exceed its base amount for that year. The provision expired 12/31/07. The proposal would extend current law to the end of 2009, with the following changes: 1) repeal the alternative incremental research credit in 2008; 2) increase the alternative simplified credit to 14% for 2008, and 3) increase the alternative simplified credit to 16% for 2009.

Congress May Consider Extenders Package Soon

BNA (subscription required) released a comment from Senator Baucus indicating that Congress is considering the extenders package. This package includes legislation for a number of tax provisions that expire every year if Congress does not act to extend the provisions. The federal research and experimentation tax credit is one of these provisions. BNA indicates that Congress may take action on the extenders package as early as this week or by the end of May.

Hillary Proposes to Increase the Federal R&E Tax Credit

Hillary Clinton unveiled her plan to increase the federal research and experimentation tax credit.  The summary of the proposal is as follows:

  • Enacting the Largest Expansion of Tax Benefits for Research and Job Growth in a Generation: Increase the existing R&D credit by 50% and create a new 40% R&D credit for basic research. These steps will reward high-wage job growth in the U.S. and help make U.S. manufacturers and research companies more globally competitive.
  • Creating New High Tech Jobs With at Least 15 New Innovation and Research Clusters Across the U.S.
  • Launching a New Insourcing Markets Tax Credit to Spur Business Investment in Communities Facing Global Competition.
  • Catalyzing a 21st Century Manufacturing Sector with a New MARPA-Research Program, a Green-Manufacturing Extension Program and Made Green in America Fund: These initiatives will help small- and medium-sized manufacturers prosper, including in new renewable and clean energy markets.