Baldwin Introduces Bipartisan Bill to Support American Businesses’ Research and Development and Outcompete China

WASHINGTON, D.C. – U.S. Senator Tammy Baldwin (D-WI) joined a group of her colleagues in reintroducing the American Innovation and Jobs Act, bipartisan legislation that will expand and strengthen American small businesses’ research and development (R&D) investments and help America outcompete global rivals, like China, who are significantly investing in R&D.

“When we invest in research and development, we invest in our American workers, small businesses, and economy. Wisconsin is a state that makes things, and I’m committed to ensuring our Made in Wisconsin economy and workers have the tools they need to pioneer the new breakthroughs and create good-paying jobs across the state,” said Senator Baldwin. “I am proud to work with Republicans and Democrats to boost American innovation, support American workers and businesses, and ensure that we don’t let countries like China get a leg up on us.”

Currently, companies and startups investing in R&D can claim tax incentives that help them invest in developing new, innovative products that lead to additional jobs and a stronger economy. The bipartisan American Innovation and Jobs Act builds on this by expanding the refundable R&D tax credit and extending it to more startups and small businesses. In addition, the bill reverses a change in the 2017 tax law that limits companies from fully deducting R&D investments each year.

Specifically, the American Innovation and Jobs Act would help businesses innovate and create jobs by:

• Restoring incentives for long-term R&D investment by ensuring that companies can continue to fully deduct R&D expenses each year by repealing the change made by the Tax Cuts and Jobs Act to section 174 of the tax code.
• Expanding support for innovative startups by:
  • Immediately doubling the cap on the refundable R&D tax credit from $250,000 to $500,000, and ultimately raising it to $750,000 over ten years.
  • Expanding access to the R&D tax credit for startups by lowering certain threshold needed to qualify.
• Expanding the number of startups eligible to use the refundable R&D credit by:
  • Increasing the eligibility threshold from $5 million to $15 million in gross receipts.
  • Increasing the period during which startups can claim the credit from 5 years to 8 years after beginning to generate at least $25,000 in revenue.

The bill is led by Senators Maggie Hassan (D-NH) and Todd Young (R-IN) and co-sponsored by 33 of their Senate colleagues.

Full text of the bill is available here.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.