NEC Urges the Senate to Pass American Innovation and Jobs Act
For years businesses have been allowed to fully deduct their R&D expenses in the same year because the tax code appreciated the importance of research and development. However, under a provision of the Tax Cuts and Jobs Act of 2017 that went into effect for the 2022 tax year, businesses must amortize or deduct these expenses over a period of years. This will ultimately make R&D more costly to conduct in New England and across the U.S.
The New England Council believes firmly that the current Research and Development amortization requirement will halt and harm our region’s continued growth and leadership on the global stage. Fortunately, New England’s own Senator Maggie Hassan (D-NH) recently partnered with Senator Todd Young (R-IN) to reintroduce the American Innovation and Jobs Act. This bill would reverse the changes put in place under the Tax Cuts and Jobs Act of 2017 and would allow businesses to continue to fully R&D expenses each year.
The legislation also raises the cap over time for the refundable R&D tax credit for small businesses and startups, and expands eligibility for the refundable R&D tax credit so that more startups and new businesses can use it. Therefore, we respectfully encourage the New England Senate delegation to support the bipartisan American Innovation and Jobs Act.