Federal Research and Development Tax Credit

The IT sector is a strong contributor to economic growth (as much as 40% today) and an enormous investor in research and development - the engine that keeps the sector innovative and growing. Thus, the Federal R&D tax credit provides a critically important boost to the tech sector in the United States. The credit, however, has been subject to a series of legislated extensions, followed by uncertainty and in some cases a lapse, before it can be reinvigorated by new legislation. This hurts effective R&D planning and forces continual legislative attention on something that should be a permanent part of the tax structure. Right now, the credit has lapsed again and legislation renewing and revising it for a set period is pending.

Congress should act to make the credit permanent or, at least, extending it for a substantial period of time beyond the current R&D planning horizon.