In baseball, three strikes and you're out. But not so with federal legislation. The U.S. R&D tax credit expired Dec. 31, 2005, for the 12th time since it was created in 1981. And it is not out of the realm of possibility Congress shortly will act on an improved and expanded version of the credit. Both the House and Senate passed tax reconciliation bills before the recent holiday recess renewing the R&D tax credit but adjourned before they could work out their differences.
Among organizations now urging Congress to pass the credit retroactively to Jan. 1 is the Washington, D.C.-based AeA, a trade association of high-tech companies. "It is important that Congress provides a proven incentive for U.S. companies to increase their investment in U.S.-based research and development. This tax credit is a vital component in ensuring our country's competitiveness in the global economy," says William T. Archey, AeA's president and CEO.