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Changes in R&D Tax Provisions Threaten Growth
Congress has a short-term window to act on a key tax provision that can increase research and development (R&D) spending in America.
For nearly 70 years, businesses have been able to immediately deduct 100% of their R&D (research and development) expenses, which can include costs associated with the development, testing, and improvement of products and services. However, as of January 2022, businesses are no longer able to immediately write off these expenses.
This change in R&D tax rules is constraining investment in this critical economic activity. The rate of growth of R&D spending has declined from 6.6% on average over the previous five years to less than 1% over the last 12 months, notably decreasing by 1.2% in the most recent quarter.
Small businesses rely on new technologies to keep operations running smoothly and their business growing, but these new technologies are often costly for small enterprises.
Congress must come together as soon as possible to enact bipartisan, pro-growth tax extenders legislation to support U.S. businesses. It is imperative that Congress act now to avoid further negative impacts on economic growth. Swiftly enacting tax extenders legislation would not only reinvigorate domestic capital investment and innovation but also strengthen and expand the American workforce
In order to help some of these changes come to fruition, the Yorba Linda Chamber of Commerce and the US Chamber of Commerce have been working to inform members of Congress about this issue and the rapid need for changes. Your membership with the Yorba Linda Chamber is crucial in keeping this mission successful and allowing the Chamber to fight against tax policies that kill businesses and hurt the economy.
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