WASHINGTON D.C. – Rep. Jackie Walorski (IN-02) yesterday supported legislation to strengthen manufacturing and promote Hoosier investment. H.R.880, the American Research and Competitiveness Act, permanently extends and strengthens the expired research and development tax credit, while allowing small businesses to claim the credit. The bill passed the House by a vote of 274-145.
“Hoosier businesses are suffering from a complex tax code. Short-term tax policies have left Hoosier business owners constantly guessing if a group of policies are going to be around next year and hurts their ability to plan for the future and expand their business,” Walorski said. “Permanently extending the research and development tax credit will open the door for economic growth and give businesses the stability and certainty they need and support well-paying Hoosier jobs.”
Under the legislation, a simplified research credit would be made permanent. The research credit would equal:
- 20 percent of the qualified research expenses for the tax year that exceed 50 percent of the average qualified research expenses for the three tax years preceding the tax year, plus
- 20 percent of the basic research payments for the tax year that exceed 50 percent of the average basic research payments for the three tax years preceding the tax year, plus
- 20 percent of all expenses (without regard to a base amount) paid to an energy-research consortium for research conducted for the taxpayer.
- The traditional 20 percent credit that was calculated using a base period would be repealed.
- In addition, eligible small businesses ($50 million or less in gross receipts) would be able to claim the credit against AMT liability.
The bill now heads to the Senate for further consideration.
Walorski represents the 2nd Congressional District in Indiana, where she serves as a member of the House Veterans’ Affairs Committee, House Armed Services Committee, and House Committee on Agriculture.