Myles Braithwaite's blog
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
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.
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.
