The House of Representatives passed bipartisan tax legislation restoring immediate deductions for business research and development. H.R.7024, the Tax Relief for American Families and Workers Act, was sent to the Senate on a vote of 357 to 70, with strong support from both Republicans and Democrats.
The bill awaits an uncertain future in the upper chamber, with some Senate Republicans calling for hearings and others eager to make changes to the bill. The voice of small business is crucial in ensuring that the Senate passes the bill and time is of the essence. Any modifications the Senate makes could introduce delays and complications that may hinder the progress of this vital legislation. Please add your business to the list of small businesses asking the Senate to pass this critical legislation and provide much needed tax relief.
We, the undersigned small businesses, urge the Senate to quickly pass H.R.7024 allowing for the deduction of research and development (R&D) expenses in the year they are incurred. On January 29, the U.S. House passed the Tax Relief for American Families and Workers Act with strong bipartisan support and a vote of 357 to 70.
Research and development form the backbone of innovation and progress and are paramount to the vitality of American small businesses. As entrepreneurs and contributors to our local and national economies, we understand the significance of fostering an environment that encourages R&D investments for our businesses and our communities.
The provision in the Tax Cuts and Jobs Act of 2017 now in effect requires businesses to amortize R&D expenses over a period of five years. Forcing businesses to deduct R&D expenses over several years creates cash-flow problems, substantially higher tax bills, and disincentivizes investment in R&D activities. The current tax law is especially difficult for start-ups or R&D-focused companies without the financial resources to pay the associated tax. Furthermore, if the R&D results are not successful, they do not provide revenue so there is no future benefit from those activities. This is counter to our nation’s entrepreneurial spirit.
It is critical that the Senate pass this legislation immediately to avoid forcing businesses to delay complicated tax return amendments or future year carryforwards. If Congress fails to act, businesses may be forced to pay thousands or even millions of dollars in additional taxes. American businesses have a March 15 tax filing deadline and individuals have an April 15 filing deadline. Accountants across America are waiting to file these returns to see whether the Senate will act. For many small businesses, this will literally determine whether they can remain in business or will need to lay off employees. Days matter.
This comprehensive bill is an investment in the future that will yield long-term dividends, helping businesses like ours prioritize R&D activities and remain competitive in the dynamic global market. With such broad bipartisan support, it is our sincere hope that the Senate can act quickly to provide these much-needed tax updates. Thank you for your attention to this matter, and we look forward to seeing the positive impacts of this bill on our businesses and communities.