* President George W. Bush last week signed a bill that included an 18 month extension of an R&D tax credit sought by many IT groups
Last week, President George W. Bush signed into law a tax credit bill (https://www.nwfusion.com/news/2004/1005bushsigns.html) that may serve to encourage technical innovation. Part of the Working Families Tax Relief Act of 2004 also provides corporate tax cuts, including a tax credit for companies conducting R&D activity in the U.S. The legislation allows firms to get a tax credit of up to 10% of R&D spending.
The tax cut package enacts a seamless, 18-month extension of the research and development tax credit that expired on June 30. Last month the U.S. Senate and House of Representatives passed the R&D tax credit extension by votes of 92-3 and 339-65 respectively.
The Information Technology Association of America (ITAA) praised the extension for encouraging economic development. “Sustained research and development in high technology fields is critical to America’s ability to compete in a global marketplace,” says Harris Miller, ITAA president. “This extension provides some security for companies pushing the technology envelope.”
Other industry groups such as the Business Software Alliance, TechNet and the Computing Technology Industry Association (CompTIA) also lobbied for R&D incentives to spur growth. (See “Tech groups push for extension of R&D tax credit” at https://www.nwfusion.com/news/2004/0630techgroup.html)
However, the ITAA reiterates its call for a permanent R&D tax credit. “A permanent research and development tax credit would put to rest the periodic uncertainty injected into board rooms around the country each time Congress lets the credit lapse,” Miller says.
