WASHINGTON, D.C. – Today, U.S. Senator Angus King (I-ME), a member of the Senate Armed Services Committee (SASC), is cosponsoring bipartisan legislation to help the United States outcompete foreign adversaries like China that are significantly investing in research and development (R&D). The American Innovation and Jobs Act would help American small businesses expand and strengthen research and development (R&D) by extending and making permanent vital tax credits –allowing full expensing of R&D—previously included in the 2017 Tax Cuts and Jobs Act.

Companies and startups investing in R&D have long been able to either claim a tax credit or deduct their investments, which helps them to invest in developing new, innovative products. The legislation would also permanently restore full expensing of R&D costs while allowing businesses to retroactively take advantage of the deduction for the tax years during which full expensing had expired.

“’Made in America’ products are essential to demonstrating American superiority on the world stage – from maintaining access to critical supply chains to preserving control of sensitive intellectual property,” Senator King said. “The bipartisan American Innovation and Jobs Act will allow American small businesses to innovate and grow their footprints with the certainty of expanded, permanent tax credits that make this critical research more economically desirable. I want to thank my colleagues on both sides of the aisle for recognizing the importance of strengthening American industry to build jobs here at home, address national security challenges, and compete on the global stage.”

More specifically, the American Innovation and Jobs Act would:

• Restore incentives for long-term R&D investment by ensuring that companies can continue to fully deduct R&D expenses each year by repealing the change made by the Tax Cuts and Jobs Act to section 174 of the tax code.
• Expand support for innovative startups by:
• Immediately doubling the cap on the refundable R&D tax credit from $250,000 to $500,000, and ultimately raising it to $750,000 over ten years.
• Expanding access to the R&D tax credit for startups by lowering certain threshold needed to qualify.
• Expand the number of startups eligible to use the refundable R&D credit by:
• Increasing the eligibility threshold from $5 million to $15 million in gross receipts.
• Increasing the period during which startups can claim the credit from 5 years to 8 years after beginning to generate at least $25,000 in revenue.

In addition to King, cosponsors of the legislation include Senators Todd Young (R-IN), Maggie Hassan (D-NH), James Lankford (R-OK), Jeanne Shaheen (D-NH), Steve Daines (R-MT), Mark Warner (D-VA), John Barrasso (R-WY), Jacky Rosen (D-NV), Thom Tillis (R-NC), Gary Peters (D-MI), Roger Marshall (R-KS), Alex Padilla (D-CA), Tommy Tuberville (R-AL), Patty Murray (D-WA), John Kennedy (R-LA), Amy Klobuchar (D-MN), Pete Ricketts (R-NE), Mark Kelly (D-AZ), Katie Britt (R-AL), Tim Kaine (D-VA), Shelley Moore Capito (R-WV), Catherine Cortez Masto (D-NV), Deb Fischer (R-NE), Tammy Baldwin (D-WI), Jerry Moran (R-KS), Ben Ray Lujan (D-NM), Bill Hagerty (R-TN), Chris Coons (D-DE), Markwayne Mullin (R-OK), Elissa Slotkin (D-MI), Roger Wicker (R-MS), Ted Budd (R-NC), Jon Ossoff (D-GA), Jon Husted (R-OH), and Martin Heinrich (D-NM.).

The legislation is endorsed by the R&D Coalition, which includes companies of all sizes and many trade associations including Business Roundtable, National Association of Manufacturers, Information Technology Industry Council, and the U.S. Chamber of Commerce.

As a member of the Senate Armed Services Committee, Senate Select Committee on Intelligence, and Senate Energy & Natural Resources Committee, Senator King is committed to advancing American competitiveness in 21st century technologies and reducing America’s reliance on fossil fuels while improving national security and strengthening cyberdefenses. Senator King is the co-chair of the Senate Semiconductor Caucus, and has been one of the Senate’s leading advocates for improving battery technology and recycling as a way to strengthen national security and create good-paying American jobs. He was also a cosponsor of the Critical Minerals Security Act to direct the U.S. Department of the Interior to evaluate the global supply and ownership of critical minerals, establish a process to assist U.S. companies seeking to divest critical minerals operations in foreign countries, and develop a method for sharing intellectual property for clean mining and processing technologies with U.S. allies and partners.

Full text of the legislation can be found here.

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