U.S. Senators Todd Young (R-Ind.), Maggie Hassan (D-N.H.), Catherine Cortez Masto (D-Nev.), Rob Portman (R-Ohio), and Ben Sasse (R-Neb.), all members of the Senate Finance Committee, introduced the bipartisan American Innovation and Jobs Act to support research and development (R&D) investments by innovative small businesses and startups. At 10 AM today, the Senate Finance Committee will hold a hearing on supporting domestic manufacturing through the tax code.
Companies and startups investing in R&D can either claim a tax credit or deduct their investments, which helps them to invest in developing new, innovative products that lead to additional jobs and a stronger economy. The bipartisan American Innovation and Jobs Act doubles the refundable R&D tax credit and extends it to more startups and small businesses. It also reverses a change in the 2017 tax law to ensure that companies can continue to fully deduct R&D investments each year.
“Now, more than ever, we must find bipartisan solutions to stimulate our economy, get Americans back to work, and ensure we maintain our position on the world stage as the leader in scientific and technological innovation. The American Innovation and Jobs Act would incentivize job-creating R&D activity in the United States, particularly among start-ups, to help our country emerge from the disastrous economic impact of the pandemic. I hope to work with my Senate colleagues on both sides of the aisle to pass this important legislation this year,” said Senator Young.
“Providing support to startups and small businesses will help us jumpstart the economy and create jobs here in the U.S.,” said Senator Hassan. “Our bipartisan legislation would strengthen and expand R&D tax incentives, which will help drive innovation, promote economic recovery, and help U.S. businesses outcompete foreign manufacturers. I will keep working with my colleagues on both sides of the aisle to gain support for this important measure.”
“Nevada’s startups and small businesses are fueling cutting-edge advancements that will help us beat this pandemic and bring back our economy,” said Senator Cortez Masto. “It’s vital that we encourage this innovation by making R&D tax credits more accessible, so that startups and small businesses can focus on paying their employees, creating jobs, and boosting the economy.”
“Research and development spurs innovation and drives the U.S. economy – reversing the change to allow full expensing instead of amortizing R&D expenses over five years will help ensure the U.S. remains the world leader in technological advancement,” said Senator Portman. “This legislation also expands the R&D credit for small businesses and start-ups, which are often the drivers of new breakthroughs and ideas. This credit comes at a crucial time while our economy is rebuilding from COVID-19.”
“This just makes sense. We should do what we can to spur on scientific research and development,” said Senator Sasse. “This common-sense bipartisan legislation encourages reinvestment — growing opportunity for the American people.”
The bipartisan American Innovation and Jobs Act supports innovative businesses and helps create jobs 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
Expanding eligibility for the refundable R&D tax credit so that more startups and new businesses can use it