AIA welcomes the House vote to permanently extend the research and development tax credit which lapsed at the end of 2014. It provides an important incentive during these times of fiscal austerity for thousands of companies to make long-term investments in innovation and is critical to creating economic growth. Particularly at a time when DOD is actively seeking new sources of innovation, it’s imperative that we do everything in our power to incentivize companies in every sector to invest in innovative ideas and solutions.
This credit supports companies that invest working capital in basic research and in applied research aimed at the creation or improvement of products. More than 70 percent of the credit is used to fund the salaries of R&D workers who hold the kinds of high-quality jobs that fuel our national economy, with the remainder applied to investment in new plant and equipment.
Currently, the U.S. significantly trails other leading countries in providing incentives for companies to conduct research and development. Making this critical tool for spurring investment and innovation permanent helps maintain the American edge in innovation and provides companies with the certainty they need for long range planning. The House is to be congratulated for voting to ensure American companies can rely on this credit going forward and we encourage the Senate to pass the bill as soon as possible.
