WASHINGTON, D.C.-Senators Max Baucus (MT-D) and Orrin Hatch (UT-R) have introduced legislation that would replace the soon-to-expire research and development (R&D) tax credit with the “alternative simplified credit,” say the Precision Metalforming Association (PMA) and the National Tooling and Machining Association (NTMA).
The new credit would be permanent, and enhance the "simplified alternative credit," which has provided a more direct incentive to innovation-oriented companies. Added as an alternative to the traditional research credit in 2006, the simplified credit addressed changes in business models and economic circumstances that had prevented some businesses from fully using the research credit. Although many Congresses have promised to make the R&D credit permanent, it has been extended 13 times and is a valuable campaign issue.
“Much of our economic vitality comes from the innovation, research and intellectual property stemming from this tax credit,” says Baucus.
“If we want to strengthen our economy and create jobs, both in the near-term and in the longer run, it is vital that we maintain and even enhance our position as the world leader in innovation,” says Hatch. “One proven way to foster strong economic growth and job creation is to increase productivity, and most productivity gains are derived from technological advances.”