On September 27, 2017, the Trump Administration, the House Committee on Ways and Means and the Senate Committee on Finance released its “Unified Framework for Fixing Our Broken Tax Code.”
Specifically stated in the framework, is the preservation of the research and development (R&D) tax credit, which is noted as an incentive that has been proven to effectively promote policy goals important to the American economy.
This statement is something I can certainly agree with, as I have helped hundreds of clients take advantage of this incentive throughout my 30+ year career, and have seen firsthand just how crucial this credit is to their investment in future R&D projects.
For this reason, I personally take great comfort in knowing that this credit is something that both sides of the aisle agree on, as it became a permanent incentive less than two years ago when President Obama signed it into law as part of the PATH Act of 2015.
It’s important to note that the credit was originally enacted in 1981, and at that time it was intended to incentivize domestic R&D, which would encourage technological innovation and lead to job creation and a stronger U.S. economy. Since that time, the government’s investment in private industry R&D has been recognized as an effective means to achieving the goals of national economic growth and productivity gains.
Businesses should be encouraged that the preservation of a permanent R&D credit is included in the administration’s stated tax reform, and that this incentive is acknowledged as a critical tool for businesses to stay competitive and grow in today’s global marketplace.
