Senate Jobs Bill Drops R&D Credit

Senate Majority Leader Harry M. Reid’s (D-Nev.) decision to proceed with a scaled-down jobs bill leaves the lapsed tax credit for R&D spending in limbo. The research credit, which encourages companies to keep their R&D activities in the U.S., expired at the end of 2009. Earlier this month, Senate Finance Committee Chairman Max S. Baucus (D-Mont.) proposed an $85 billion jobs creation bill that included $31 billion for a one-year extension of the R&D credit and other expired tax breaks. But Reid announced on Feb. 11 that the Senate will consider a streamlined $15 billion package that doesn’t include any tax extensions. The tax credit, which President Barack Obama proposed to make permanent in his 2011 federal budget, is widely used by the chemical and pharmaceutical industries. The Society of Chemical Manufacturers & Affiliates is among the business groups urging Congress to permanently extend the credit. “Government incentives, such as the R&D tax credit, go a long way toward spurring innovation of products and protecting and growing jobs,” says William E. Allmond IV, SOCMA’s vice president of government relations.