WASHINGTON -- Sen. Chuck Grassley of Iowa today advanced a provision to help small businesses access a tax benefit usually associated with large companies.
“The research and development tax credit is popular with established companies that use it to innovate and create jobs,” Grassley said. “It’s only fair to help small businesses as major job creators receive the same incentive.”
Grassley’s proposal received approval in the Finance Committee, which today passed a package extending key expired provisions. Under current law, small businesses frequently are unable to benefit from the research and development tax credit because the individual Alternative Minimum Tax eliminates certain credits and deductions, such as the research and development tax credit, that are allowed under the regular income tax. Grassley’s provision fixes that problem.
Grassley’s language was combined with language from fellow senators that applies the research and development tax credit to start-up companies that do not benefit currently from it. That proposal expands the research credit to make it more accessible for startup businesses that don’t earn profits, by letting them count the credit against payroll taxes.
The cost of the research and development credit provisions is offset by moving certain uncollected and delinquent tax accounts the IRS has been unwilling or unable to collect to the Department of Treasury, where the cases can be worked by Treasury’s debt collection arm and private contractors.
The tax extenders package now goes to the floor for consideration by the full Senate.
Also in today’s committee-passed bill, Grassley secured the renewal of expired wind energy tax provisions and a reinstatement of a tax incentive for domestic biodiesel, another long-time priority.
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