Research Tax Credit Set for Permanent Extension in House
The U.S. House of Representatives plans to vote in May to make the research tax credit permanent, the first step toward ending a 33-year lapse-and-revive cycle that has frustrated companies such as Intel Corp. (INTC) and Agilent Technologies Inc.
House Majority Leader Eric Cantor, a Virginia Republican, announced the plan yesterday in a memo. The research credit, first enacted in 1981, expired most recently on Dec. 31.
“The lack of certainty this creates has thwarted investment by the private sector,” Cantor wrote in the memo to House members outlining the schedule for May. The bill “will put American companies, especially American manufacturers, on par with their international competitors whom already have permanent R&D incentives.”
The Senate Finance Committee voted earlier this month to expand and extend the research credit and dozens of other expired tax breaks through 2015. The Senate’s two-year extension would cost the government $15.4 billion in forgone revenue, according to the nonpartisan Joint Committee on Taxation.
The House approach is different. Republicans, led by Ways and Means Committee Chairman Dave Camp of Michigan, are splitting up the package of lapsed tax breaks and pushing for permanent extensions of some of them.
Camp’s committee scheduled votes on April 29 on six separate bills permanently extending tax breaks, including the research credit. Another would continue a break backed by General Electric Co. and Citigroup Inc. (C) that lets them defer U.S. taxation on overseas financing income.
Cantor’s memo said similar bills would follow in the coming months.
Other tax breaks that have expired include those that allow taxpayers a deduction for college tuition payments they make for their grandchildren, provide incentives for the renewable energy industry, and give a tax break for the building of race tracks.
The research and development credit was first granted in 1981 and has been regularly extended.
The House, which returns from a recess next week, also will take up annual spending bills to fund military construction, the Veterans Affairs Department and the legislative branch itself.
It’s the chamber’s earliest start on spending bills since 1974. It comes six months after a partial government shutdown caused by a partisan dispute over fiscal matters, and with a spending total for next year already agreed upon.
The House may also take up a water infrastructure bill that would boost construction of levies and flood prevention projects, while expanding dredging at U.S. ports, Cantor said.
House and Senate lawmakers are trying to agree on the first such measure since 2007. U.S. port officials back a provision in the House version that would let them use non-federal money to deepen certain harbors and shipping channels, using their own money as a hedge against future delays from Washington.
To contact the editors responsible for this story: Jodi Schneider at email@example.com Laurie Asseo, Mark McQuillan