A Bill That Continues Full Deduction of the R & D Tax Credit
“The Motor & Equipment Manufacturers Association (MEMA) commends Senators Todd Young (R-IN) and Maggie Hassan (D-NH) for introducing the “American Innovation and Jobs Act of 2021.” This measure when passed, will continue full availability of the research and development tax credit for U.S. companies. This step is vital for our small, medium, and large sized motor vehicle parts manufacturing members, with 907,000 employees in all 50 states. Unfortunately, the 2017 tax reform legislation ended full first year deductibility of this important credit on January 1, 2022. We thank Senators Young and Hassan for their leadership in correcting this problematic provision.
If the Young-Hassan measure does not pass this year, the timeframe expands to five years for companies to obtain full deductibility of their research and development expenditures. This development will raise R & D costs, which will undermine the competitiveness of the 1000 MEMA member companies as well as overall U.S. economic growth and job creation in the country. We are pleased to be working with the R &D Coalition to get this important MEMA priority through Congress this year.”
The American Jobs and Innovation Act will also raise the cap on the R & D tax credit for small businesses and startups, as well as expanding eligibility for these entities, if companies chose that option.