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R&D Tax Credit Extended until December 31, 2009
October 3, 2008 the President signed the Emergency Economic Stabilization Act of 2008 and passed an act extending the R&D tax credit until December 31, 2009. After allowing the credit to expire 13 times in the past 25 years (most recently on December 31, 2007) this is a relief for many companies who depend on the credit and lobbying groups such as the R&D Credit Coalition. For the 2009 tax year, the Act also increases the Alternative Simplified Credit from 12% to 14% and repeals the Alternative Incremental Research Credit. The US currently ranks 17 out of 30 countries in the Organization for Economic Co-operation and Development in offering R&D tax credits. The credit still needs to be made permanent for the US to remain competitive worldwide.IRS designates R&E tax credit Tier I issue
On April 4, 2007 the IRS designated the Research & Experimentation (R&E) Credit Claims Issue as a LMSB Tier I issue. The change in audit importance can be addressed by putting together solid and defensible studies to support tax credit claims
Industry Director Directive #1 on Research & Experimentation (R&E) Credit Claims
Congress Allows Research Tax Credit to Expire Again
Congress has allowed the research and development tax credit to expire, even though it appeared initially that lawmakers were set to renew it before recessing for the holidays.
"It was a huge disappointment and thats a fairly vast understatement," said Bartlett Cleland, senior director of tax policy for the ITAA (Information Technology Association of America). "Weve been in this situation before where Congress retroactively [approves the R&D extension] and shoots the heck out of tax planning. This really mucks things up."
Featured on Manufacturing.net
Bruce Braithwaite, CEO of Braithwaite Global, Inc., says most people tend to think of someone in a white coat in a lab or university when they think of R&D.
“In manufacturing, it’s on the shop floor, developing products and processes,” he said. “They do it every day.”
Braithwaite suggests companies turn to their scientists or engineers instead of their accountants to determine what is covered under the tax credit, noting that the credit encourages people to perform R&D and reduce costs.
Congress Poised to Boost Funding for R&D
Congressional budgeting will be in the neighborhood of $21 billion above the Presidential request, which is likely to trigger a veto. As a result, the author of the AAAS analysis expects that the budget will not be done by the October 1 deadline.ars technica - Congress poised to boost funding for science research
Of that extra $21 billion, about $4 billion is targeted for federal R&D, bringing the total to $144 billion. That represents an increase of about 2.3 percent compared to fiscal 2007; draft bills in the Senate would add another half billion to the figure.
UPDATE: Oracle, Caterpillar Executives Back Corporate Tax Cut
Several top U.S. executives said Thursday they would accept a repeal of tax breaks such as the corporate research tax credit in exchange for lower tax rates.
"I would trade it in a minute for a simple, lower rate," Safra Catz, president and chief financial officer at Oracle Corp. (ORCL), told a Treasury Department tax conference. While her software firm backs the corporate research credit, she believes the broader U.S. economy would benefit from corporate tax cut.
The chief executives of Caterpillar Inc. (CAT) and FedEx Corp. (FDX) offered similar sentiments during the morning-long tax hearing, organized by Treasury Secretary Henry Paulson Jr.
"I would happily trade all of the credits for simplification and a lower tax rate," said James Owens, Caterpillar's CEO and chairman. "I think that will benefit the U.S. economy and the global race that we are in."
CNNMoney.com - UPDATE: Oracle, Caterpillar Executives Back Corporate Tax Cut
Bill to Expand R&D Tax Break Divides Supporters
Congress is considering a major increase in the multibillion-dollar tax break for corporate research, but a proposal to change how the credit is calculated is prompting an unusual split among its beneficiaries.
The boost would follow Congress's expansion in December of the "Research & Experimentation" tax credit, which gives companies a credit on their tax bills for part of their research-and-development spending. That version increased the annual subsidy to an estimated $9.3 billion from $7.3 billion, chiefly by adding a new formula for calculating the credit.
The Wall Street Journal - Bill
to Expand R&D Tax Break Divides Supporters
Senator Hillary Clinton Unveils Innovation Agenda
U.S. Sen. Hillary Clinton, D-NY, today praised Silicon Valley for helping America become an "innovation superpower," but said prosperity will be jeopardized if politics unduly affects scientific research.
Clinton, a candidate for the Democratic presidential nomination, unveiled her "Innovation Agenda" before a crowd of Valley CEOs at the Silicon Valley Leadership Group's CEO summit at the Applied Materials headquarters in Santa Clara.
The globalization of the economy in the 21st Century poses special challenges, according to Clinton.
"Globalization has lifted more people out of poverty around the world than any other innovation in recent history," Clinton said.
Braithwaite Global Merger
Two leading U.S. Research Tax credit advisors join to form Braithwaite Global Inc.
ATLANTA, GA, January 15, 2007 -Today Braithwaite Technology Consultants Inc and Global R&D Consulting Group Inc's US Division joined together to form Braithwaite Global Inc. The joined operations will be headquartered in Global R&Ds Atlanta Georgia offices. This combination brings together the staff of two leading Research Tax Credit (RTC) advisory practices. Co-founder Bruce Braithwaite said Many companies are not aware that they can claim RTCs, and are missing out on substantial tax benefits. Braithwaite Global, with forty two years of combined experience with RTC programs employs a staff of highly experienced technical consultants with a vast array of knowledge of the types of activities eligible for the credit. Our team gives us an edge that allows us to effectively assist companies making claims under the program. Co-founder Serge de Blois said Braithwaite Global brings the advantage of a range and depth of technical capability and expert knowledge in a myriad of fields in science and technology. Supported by an in-depth understanding of the RTC program we can maximize client claims by applying our proven methodology and documentation system to the claim preparation process.
Braithwaite Global joins the US operations of Braithwaite Technology Consultants Inc. and Global R&D Consulting Group Inc. The two firms operate globally and have each been in the RTC advisory business for more than 18 years. Both have a staff of highly trained and knowledgeable RTC experts that have prepared many claims for prominent US companies. Taken together, the two entities have prepared more than 10,000 R&D tax credit claims with a total value in excess of $1 billion. They have excellent client references achieved by preparing well documented claims and by providing superior client service.
Dec. 2006 RTC Extension
The House and the Senate are in the holiday spirit and giving US companies...
On December 9, 2006, after over a year of controversy, the Congress and the Senate passed the Tax Relief and Health Care Act of 2006 that will extend the research tax credit program that expired on December 31, 2005. With a $16.3 billion budget, the uncertainty is finally eliminated for fiscal years 2006 and 2007. The legislation is now going on to President George W. Bush for his signature.
