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| April 22nd, 2004 |
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Media Contact(s): Adam Elggren (202) 224-3370 |
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Printable Version |
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STUDY SHOWS RESEARCH TAX CREDIT VITAL TO ECONOMY
Hatch Legislation Would Extend Credit to 2005 |
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Washington — Sen. Orrin G. Hatch (R-Utah) issued the following statement upon today’s release of a new study demonstrating the economic benefits of making the research tax credit permanent:
“This study highlights some important but little-known facts. First and foremost, the research credit is really a jobs credit — and only for jobs created in the United States.
“Second, the credit is important not only for big businesses, but for medium and small businesses. In fact, 65 percent of the firms claiming the credit have assets of $10 million or less. In my home state of Utah, five percent of the workers — 51,000 people — work in the research-intensive high technology sector. That includes over 10,000 people working just to design computer systems, and over 6,000 producing medical equipment. And there is a lot of R&D; taking place outside of Utah’s high tech sector. Most of these workers are employed by small and medium-sized businesses.
“Finally, the study shows that the research credit is important to businesses all over the nation. While it does show research is concentrated in a few states, every state has some research activity performed there and with a strong research credit in place, those activities will only increase and bring more jobs to the U.S. This will stimulate even more economic growth over the long-term.
“I am pleased the Senate voted unanimously in favor of extending and strengthening the credit, even though I am disappointed that this proposal is only for 18 months. I look forward to continuing to work with my House and Senate colleagues to adopt a permanent tax credit, but we must not lose sight of the urgent need to act quickly to ensure the credit does not expire on June 30.”
Since its enactment in 1981, the research tax credit has become a powerful and effective incentive for firms to increase research spending. The new study, commissioned by the R&D; Coalition and conducted by Cathy Koch, PhD at Washington Council Ernst & Young, confirms that the research tax credit benefits companies of all sizes in a wide range of industries.
With the research credit scheduled to expire June 30, 2004, Hatch’s amendment to S. 1637 (the Jumpstart our Business Strength Act) would extend this expiration date to December 31, 2005, and would establish a new simplified credit that accounts for changes in business models and economic circumstances.
To view a copy of the study, visit www.nam.org/RnDCredit.
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