- House Bill Would Make R&D Credit Permanent on Bi-Partisan Vote
- May 26, 2014
- Law Firm: Sutherland Asbill Brennan LLP - Washington Office
On May 9, the U.S. House of Representatives passed a bill that would permanently extend the research and development tax credit. The bill passed 274-131 with support from all-but-one Republican and 62 Democrats. House Majority Leader Eric Cantor (R-Va.) stated he believed that making the R&D credit permanent “is one of the most generative things we can do from a policy standpoint that has been confirmed by independent economic analysis, to grow jobs and to have America work again for more people.”
It has been estimated that making the R&D credit permanent will cost $156 billion over the next decade. Although many on both sides of the aisle support the R&D credit, some members of Congress were troubled by the idea of making the credit permanent without including a revenue raiser to offset the lost tax revenue. A statement by the Office of Management and Budget signaled that the current House bill will be vetoed by the President, stating that the administration believes “making traditional tax extenders permanent without offsets represents the wrong approach.” The bill now heads to the Senate, which is preparing a different bill that extends most expiring credits, including the R&D credit, through 2015.