Hartford Reporter

Washington, D.C. – On April 18, on Tax Day, Reps. John B. Larson (CT-01) and Ron Estes (KS-04), joined by Reps. Darin LaHood (IL-16), Suzan DelBene (WA-01), Jodey Arrington (TX-19), and Jimmy Panetta (CA-19), among 66 original cosponsors, reintroduced their American Innovation and R&D Competitiveness Act. The bill permanently allows for immediate research and development expensing looking back to 2022 when the provision expired and has received broad bipartisan support.

“Research and development play an integral role in creating good-paying jobs across the country, especially as we rebuild our economy from the impacts of the pandemic. If we do not act to fix the R&D tax deduction, there will be serious repercussions on jobs and our economy. Rep. Estes and I joined together on this legislation to ensure the R&D tax deduction does what it was designed to do: support American businesses and workers as they develop technologies of the future,” said Larson.

"Research and development is critical for our American economy, and it's imperative that we give American innovators the tools and incentives to conduct that R&D right here in the United States," said Estes. "More R&D here at home means more jobs now and in the future. Rep. Larson and I know that businesses and manufacturers in our districts and across the country need immediate R&D expensing, and we're joined by a number of our colleagues on both sides of the aisle that want to see this bill passed. With the 2023 Tax Day upon us, the time for waiting on immediate R&D expensing is over – Congress should pass the American Innovation and R&D Competitiveness Act now."

"The American Innovation and R&D Competitiveness Act offers a much-needed boost for the equipment manufacturing industry at a time when America faces adverse inflation and strained supply chains. By restoring strong incentives for research and development expenditures, this legislation will encourage more equipment manufacturers to develop the best and most advanced products in the United States, driving domestic innovation and growth across the industry," said Kip Eideberg, Senior Vice President of Government and Industry Relations for the Association of Equipment Manufacturers (AEM). "AEM applauds Representatives Ron Estes and John Larson for introducing the bipartisan American Innovation and R&D Competitiveness Act and urges Congress to pass it as soon as possible."

“Businesses large and small are significantly affected by this new amortization requirement. Wright-Pierce is an employee-owned water, wastewater and civil infrastructure consulting engineering firm of 325 employees with 30 staff located in Middletown, Connecticut,” said Paul Birkel, President and CEO of Wright-Pierce. “At a time when our country needs engineers more than ever to support the reinvestment in our vital public infrastructure, the expense amortization requirement in Section 174 unduly and unfairly triples our tax obligation and threatens the very existence of many firms such as ours. Repeal of this requirement retroactive to tax year 2022 is essential to achieve the goals of the Infrastructure Investment and Jobs Act and to prevent the disruption of critical municipal and governmental engineering services needed to support the economic prosperity of our country.”

"This R&D incentive is a powerful tax tool for us to not only invest in the short-term, but to sustain our investment toward long-term research and development for even greater impact to the economy, our people, and our customers," said Nathan Ebert, Vice President and General Manager, BG Automation in Derby, Kansas. "R&D has been both a growth generator and growth accelerator for BG Products, Inc. and BG Automation, LLC. We at BG truly appreciate the bipartisan work across our legislature in granting and hopefully permanently extending this opportunity for American businesses of all sizes."

Immediate R&D expensing incentivizes long-term investments in innovation and technological breakthroughs by allowing a business to deduct research and development activities in the tax year that they occur. The American Innovation and R&D Competitiveness Act will ensure that the United States continues to be the world leader in innovation by repealing a section of the Tax Cuts and Jobs Act (TCJA) that required the amortization of R&D expensing over five years beginning in 2022.

Issues: Economy Tax Policy 

Original source can be found here.