House passes R&D tax credit bill, but hurdles still remain

By Gayle S. Putrich
Staff Reporter

Published: May 9, 2014 1:03 pm ET
Updated: May 9, 2014 2:37 pm ET

Image By: Rep. Camp Rep. Dave Camp

Related to this story

Topics Public Policy Government & Legislation
Companies & Associations

WASHINGTON — A tax credit that would make a popular, business-friendly tax break for corporate research and development a permanent part of the U.S. tax code was passed by the House of Representatives May 9 with a 274-131 vote.

But businesses shouldn’t break out the champagne just yet.

The Senate is at work on its own, less-sweeping version of the bill, which would extend the expired tax credit for two years. And even if the so-called R&D tax credit does survive both chambers of Congress, President Barack Obama has said he would veto it because of its hefty price tag.

Congressional budget analysts estimate the government would lose about $156 billion in revenue over 10 years under the House bill (HR 4438), which does not include any offsets to recover the tax credit’s cost.

“We ought to extend the research and development tax credit to help businesses invest in innovation and we ought to do it permanently,” Rep. Steny Hoyer (D-Md), the House Minority Whip, on the floor Friday. “But Republicans are asking us to it without paying for it, which would add $155 billion to the deficit.”

The credit has been extended 15 times since it was enacted in 1981, usually one or a few years at a time. Rep. Dave Camp (R-Mich.), chairman of the powerful House Ways and Means Committee said Friday that Democrats have voted for the R&D tax credit 71 times without offsets, including two affirmative votes from President Obama when he was a senator.

“Republicans and Democrats have long supported the research and development tax credit… because it allows companies to innovate,” Camp said. “Let’s stop the charade. This credit will be extended. Let’s give businesses the certainty they need, so they can grow and invest and create jobs.”

The plastics industry, particularly the Society of the Plastics Industry Inc., has been supportive of the bill, which was co-authored by Reps. Kevin Brady (R-Texas) and John Larson (D-Conn.).

"The tax credit is largely a jobs credit — 70 percent of credit dollars are used to pay the salaries of highly skilled R&D workers in the U.S.,” said SPI President and CEO William Carteaux, in a news release. “A robust and permanent research and development tax credit is critical to the plastics manufacturing industry’s competitiveness, innovation and job creation.”


Comments

House passes R&D tax credit bill, but hurdles still remain

By Gayle S. Putrich
Staff Reporter

Published: May 9, 2014 1:03 pm ET
Updated: May 9, 2014 2:37 pm ET

Post Your Comments


Back to story


More stories

Image

Nanotechnology isn't science fantasy

March 30, 2015 12:15 pm ET

ORLANDO, FLA. — Nanotechnology is fast moving from the world of science fiction to science fact, with developments and...    More

Image

Mucell adds polypropylene parts to its potential resin applications

March 30, 2015 11:59 am ET

Structural polypropylene applications are now candidates for the use of Mucell microcellular foaming technology.    More

Image

Sipospack to build new flexible packaging plant in Hungary

March 30, 2015 9:38 am ET

Hungarian flexible packaging producer Sipospack Kft. is investing nearly 3 million euros ($3.2 million) in an expansion at a new site at Sóskút in...    More

Image

Getting a real feel for how 'vinyl saves lives'

March 27, 2015 6:00 am ET

While I'm certainly not shipping off to Africa anytime soon, I got a taste of what medical professionals go through in the fight against Ebola and...    More

Image

Johnson's political outlook shaped by a plastics business view

March 27, 2015 6:00 am ET

When Sen. Ron Johnson (R-Wis.) traded plastics for politics in 2010, he didn't leave his business sense behind. He carried the lessons of 30 years in ...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events