US Lawmakers Urge Extension Of R&D Tax Credit

by Mike Godfrey, Tax-News.com, Washington

25 June 2004

Three senior members of the US Senate have expressed concern over the pending expiration of the Research & Development tax credit on June 30, and have urged their fellow lawmakers to back an extension to the provision.

In a statement, Sen. Chuck Grassley, chairman of the Committee on Finance, Sen. Max Baucus, Ranking Democrat, and Sen. Orrin Hatch, Ranking Republican, declared that:

“We want to take this opportunity to remind our colleagues of the importance of research and development to the growth of our economy and to improvements in our future standard of living."

The Senators argued that the R&D credit has a “proven track record” of creating jobs, and made possible innovations in several important scientific areas, including the development of life-saving drugs, computer technology, transportation safety and military advances, which they said “are the direct result of long-term, high-risk investments in research and development made by American businesses".

“The research tax credit helped make many of those long-term investments financially feasible. It must be extended expeditiously and seamlessly,” the statement continued, adding:

“We must fill in any lapse between expiration of the credit and enactment of an extension, so that companies that have planned research projects while counting on the research credit can continue those projects with confidence.”

The lawmakers are planning to work in conference for a retroactively effective provision backdated to the credit’s expiration. They noted that the Senate voted unanimously in the JOBS Act to both extend and strengthen the tax credit.

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