Congress Renews R&D Tax Credit

Dec. 15, 2006
Permanent extension remains goal.

The Semiconductor Industry Association (SIA) was among organizations praising Congress following its last-minute renewal of the U.S. research and development (R&D) tax credit as part of broader legislation passed in December.

"We hope this spirit of bipartisan cooperation carries over into 2007, when the 110th Congress takes up other legislation to enhance the competitiveness and innovation capabilities of U.S. high-tech companies," says George Scalise, SIA president.

The legislation renews the research credit retroactively to Jan. 1 through 2006, and extends through 2007 an expanded version of the credit that offers an alternative to the traditional credit formula. The previous credit expired Dec. 31, 2005, for the 12th time since it was created in 1981.

Passage of legislation to make the R&D credit permanent remains a priority for many, including the National Association of Manufacturers (NAM). The Washington, D.C.-based trade association points out that R&D activities frequently span five to 10 years, and manufacturers need guarantees that the credit will remain available through the life of the projects.

The credit also helps keep the United States competitive, NAM says, a sentiment echoed by the SIA's Scalise. "Passage of this legislation has been a critically important objective and is part of our industry's agenda to promote innovation and enhance U.S. competitiveness in the global economy," he says.

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Jill Jusko

Bio: Jill Jusko is executive editor for IndustryWeek. She has been writing about manufacturing operations leadership for more than 20 years. Her coverage spotlights companies that are in pursuit of world-class results in quality, productivity, cost and other benchmarks by implementing the latest continuous improvement and lean/Six-Sigma strategies. Jill also coordinates IndustryWeek’s Best Plants Awards Program, which annually salutes the leading manufacturing facilities in North America.

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