Arizona Technology Council Commends Bipartisan Tax Bill to Reinstate Important R&D Tax Provision for Small Businesses and Innovators in ArizonaTax Relief for American Families and Workers Act Could Potentially Impact More Than 1.5 Million American Jobs
PHOENIX - Feb. 13, 2024 - PRLog -- The Arizona Technology Council celebrates the U.S. House of Representatives' passage of the Tax Relief for American Families and Workers Act, which repeals the harmful research and development (R&D) amortization provisions that went into effect in 2022.
The Council has supported H.R.7024 due to its significant economic impact. In fact, every $1 billion in R&D spending supports 17,000 jobs and small business alone accounts for approximately $90 billion of all private-sector R&D investments. Passage of the bill forwarded to the U.S. Senate could potentially impact more than 1.5 million American jobs. "Innovation is one of America's greatest strengths and a significant contributor to job creation, competitiveness and national security," Steven G. Zylstra, president and CEO of the Council and SciTech Institute. "The harmful tax change that took effect in 2022 has devastated America's small businesses and innovators who are increasingly unable to invest in critical R&D innovation. The passage of H.R.7024 brings us closer to some relief and will immediately benefit the many small- to medium-sized innovators and start-ups here in Arizona." The Council extends its gratitude to Arizona delegation members responsible for helping to advance this bill through the House, including Reps. David Schweikert, Ruben Gallego, Raúl M. Grijalva, Greg Stanton and Juan Ciscomani. For nearly 70 years, American businesses have been permitted to deduct 100% of R&D expenses from taxable income in the year those expenses were incurred. However, when Congress passed the Tax Cuts and Jobs Act in 2017, it changed the tax treatment of R&D to partially offset the revenue impact of the tax cuts. Beginning in 2022, businesses have been required to amortize R&D investments over five to 15 years, dramatically increasing their annual tax liability and disincentivizing innovation generating investments. Since the change took effect in 2022, the growth rate of R&D investments dropped from a five-year average of 6.6% to less than 1.2% last year. In the most recent quarter alone, R&D spending decreased by 2.3%. H.R.7024 is designed to bring those investments back to Arizona and greatly boost small-business and start-up activity throughout the state. Visit https://www.aztechcouncil.org/ About the Arizona Technology Council The Arizona Technology Council is Arizona's premier trade association for science and technology companies. Comprised of a diverse professional business community, Council members work towards furthering the advancement of technology in Arizona through leadership, education, legislation and social action. The Council offers numerous events, educational forums and business conferences that bring together leaders, visionaries and community members to make an impact on the technology industry. These interactions contribute to the Council's culture of growing member businesses and transforming technology in Arizona. To become a member or to learn more about the Arizona Technology Council, please visit www.aztechcouncil.org. End
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