Renewed R&D Legislation under Obama Administration
Earlier this year US businesses were rewarded generously by The U.S. House of Representatives and Obama Administration with a tasty tax break for companies investing time, money and resources into research and development (R&D).
Whilst the proposal has a long way to go before it becomes law, it does give U.S. businesses a much needed breath of air after a tough economic downturn. Under the Obama Administration the R&D tax credit, which expired at the end of last year will be permanently renewed and increased from 14% to 20% for qualifying R&D activities.
Already, the research credit and related breaks save businesses more than $12 billion a year. It’s an encouraging prospect for those businesses looking to expand research and development activities within their entity.
As early as 2010 Obama called for a $100 billion business tax credit – since then Obama has continued to push to permanently extend R&D credits for businesses, rewarding companies that develop new technologies domestically and preserve American jobs (Washington Post, 2010).
Assistant Secretary for Tax Policy, v Mark Mazur said the changes were made to clear up the confusion involved in the tax benefit scheme.
Mazur said the new rules “are part of our ongoing work to clarify the tax code to provide incentives for businesses that are innovating, increasing our competitiveness and promoting economic growth. They do not expand the definition of research.”
In any case, the best way to achieve the greatest benefits from the tax break is to seek valuable advice from someone in the business.