Press Releases

WILL THE R&D TAX CREDIT FOR SMALL BUSINESS SURVIVE?

WASHINGTON, DC – Today the House Small Business Subcommittee on Contracting and Technology heard testimony on the importance of extending and improving the Research and Development (R&D) Tax Credit.  The R&D tax credit plays a vital role in the growth of small business innovation in the United States.  The tax credit encourages small technology-based businesses to invest resources in the research, development, and testing of products and services, all of which promotes job creation.

Ranking Member of the Subcommittee Aaron Schock (R-IL) stated, “We must be focused on providing appropriate incentives to those companies which will help grow our economy and make a sustained commitment to conducting long-term, high-cost research here in the United States. The R&D tax credit is positive motivation for U.S. investment and innovation.”

The R&D tax credit is set to expire at the end of 2009. Although the credit has been popular enough to be extended 13 times over the past 20 years, Congress has failed to make it a permanent fixture of the federal tax code.  Research has shown that a large amount of small businesses depend on it as an important tool to grow their business and help the economy. A study by Ernst & Young found that of the 16,000 U.S. companies that claim the credit, more than 4,500 are companies with assets of less than $1 million. 

Ranking Member Sam Graves (R-MO) commented on the hearing, “I’m concerned about the future of the R&D tax credit with President Obama in office. The President has only increased taxes since January, not provided tax incentives to spur the economy.  In order to continue to be world leaders in technology development, we must make sure that this incentive is extended if not made permanent for our small businesses.”