By SEMA Washington, D.C., Staff
The U.S. House of Representatives passed SEMA-supported legislation to renew the research and development (R&D) tax credit, which expired at the end of 2014. The “American Research and Competitiveness Act of 2015” (HR 880) increases the alternative simplified credit from 14% to 20%, makes the credit permanent and provides small businesses with a credit against the alternative minimum tax. While supporting the bill’s intent, the White House cautioned that the president would veto the legislation in its present form since the bill would increase the federal deficit. Supporters of the bill maintain that permanently renewing the R&D tax credit will actually increase tax revenues over time as companies pay taxes on profits resulting from their investments. A similar bill has been introduced in the Senate but is on hold as senators attempt to focus on comprehensive tax reform.
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