R&D CREDIT COALITION URGES CONGRESS TO ENACT A STRONGER AND MORE RELAIBLE RESEARCH AND DEVELOPMENT TAX CREDIT FOR AMERICA’S FUTURE
March 16, 2005, WASHINGTON, D.C. – By enacting a stronger and more reliable research and development (R&D) tax credit, the United States Congress will help ensure a better tomorrow for all Americans, a representative from an R&D Credit Coalition member company told the Senate Finance Committee today.
The committee heard testimony from David Hernandez, Vice President, Taxes and General Counsel at EDS. EDS is a member of the R&D Credit Coalition.
According to Hernandez, it will take the continued support of both public and private investment in R&D to foster the level of innovation needed to keep Americans economically competitive. Innovation is a driving force behind U.S. job growth, economic vitality, and better standards of living.
“The U.S. business community needs a stable, consistent, and improved R&D credit that will strengthen its incentive value, stimulate the nation’s economic growth, and sustain the basis for ongoing global technology,” Hernandez testified. “By creating an environment favorable to private sector R&D investment in the United States, Congress can encourage companies to site new research projects here and maintain and attract the high-skill, high-wage jobs associated with those projects in the United States.”
In his testimony, Hernandez made reference to a 2004 study by Washington Council Ernst & Young that confirms the R&D credit benefits U.S. employers of all sizes, in a wide range of industries, and that perform research in all 50 states. Specifically, the study showed that in 2000 nearly 16,000 U.S. employers claimed the R&D credit. Employees in manufacturing, services, retail and wholesale trade, construction, and real estate sectors were among the greatest beneficiaries of that investment. On a percentage basis, smaller employers benefited most from the credit.
“If we want to maintain and improve that track record, it is important for Congress to adopt the changes embodied in S. 664, which was introduced in the last Congress by Senators Hatch and Baucus,” Hernandez said. “We urge the Congress to enact the Hatch/Baucus proposal in 2005.”
The R&D Credit Coalition is a group of more than 85 trade and professional associations and more than 1,000 small, medium and large companies, which engage in U.S.-based research that represent major sectors of our economy including aerospace, agriculture, biotechnology, chemicals, electronics, energy, information technology, manufacturing, medical technology, pharmaceuticals, software and telecommunications.