R&D Tax Credits Are Universally Supported
The current R&D tax break rules are undergoing some revisions, which will, as suspected by many, mean that companies across America find it easier to make claims for the innovation of their products.
More Economically Competitive:
For example the economic activity of Texas counts for over 8% of the United States economic activity as a whole. However, it only accounts for 5% of the R&D spend. The current government policy seems to be that by clarifying the regulations it will allow more R&D activities to take place as it has been shown that this type of activity results in a higher-paid workforce and more skilled employees. This in turn benefits the economy by making it more competitive. The government sees these tax breaks as a huge incentive to companies to perform more R&D and therefore benefit the US economy as a whole.
Allowing Businesses To Grow:
The R&D regulations allow businesses to invest and put their innovation at the forefront of their agendas. Many businesses do not appreciate the tax breaks to which they are entitled to and therefore do not take advantage of them. This restricts companies and their abilities to expand and share knowledge that might be of benefit to society as a whole, so both the Republicans and Democrats alike fully support this legislation. It is important that companies understand and have strategies in place to deal with the tax implications of their research and development sectors and take full advantage of breaks which are available to them.
Pressure To Change:
The changes to the R&D rules may have come about because of lobbying pressure that came from the direction of large corporations who have been missing out on the benefits over the last few years. Due to the confusion of who was entitled and what the nature of qualifying research actually is in recent times, it was felt that clarification was necessary in order to allow companies to get the most out of their R&D sectors. Research and Development is seen as a shining beacon for the US economy and something that is to be encouraged by the government in the form of making the tax breaks more universal.
Technical innovation is an important part of the US drive for economic growth. Understanding the complex rules that allow companies take part in innovation today should be an important part of any business strategy and advice should always be taken as to how they can benefit them best.