Sinema and a bipartisan group of her colleagues urged Senate leadership to expand the Research & Development tax credit in any upcoming legislative package
WASHINGTON – In a letter with a bipartisan group of colleagues, Arizona senior Senator Kyrsten Sinema urged Senate leadership to improve and expand the Research and Development (R&D) tax credit in any future legislative package to help startups and small businesses stay competitive and increase innovation.
“Expanding the research and development tax credit for Arizona small businesses and startups fuels economic competitiveness and innovation in our state and across the country,” said Sinema.
The Senators’ letter comes as a follow-up to the Sinema-backed American Innovation and Jobs Act, which repeals a tax provision from the 2017 Tax Cuts and Jobs Act that makes it more expensive for companies to invest in R&D beginning in Spring 2022. For nearly 70 years small businesses and startups have been allowed to immediately deduct their R&D expenses, but the provision from the Tax Cuts and Jobs Act would require them to deduct these expenses over several years. According to the Congressional Budget Office, amortizing R&D expenses “will reduce the incentive to invest in R&D.”
The bipartisan Sinema-backed American Innovation and Jobs Act would increase the value of R&D tax credits for small businesses and startups by: restoring incentives for long-term R&D investment by ensuring that companies can continue to fully deduct R&D expenses each year; immediately doubling and then further raising the cap over time for the refundable R&D tax credit for small businesses and startups; and expanding eligibility for the refundable R&D tax credit so that more startups and new businesses can use it.
Click HERE to read the Senators’ letter.