This week, a bipartisan bill was introduced in Congress to repeal a tax provision that makes it more expensive for companies to perform research and development in the U.S. The move could allow domestic U.S. semiconductor research to become a leading force in the global chip industry.
The bill, called the American Innovation and Jobs Act, was introduced to the Senate by Senators Margaret Hassan (D-New Hampshire), Todd Young (R-Indiana), Catherine Cortez Masto (D-Nevada), Rob Portman (R-Ohio) and Ben Sasse (R-Nebraska). A similar bill was introduced on Feb. 24 in the House by Representatives John Larson (D-Connecticut), Ron Estes (R-Kansas), Jimmy Panetta (D-California), Darin LaHood (R-Illinois), Suzan DelBene (D-Washington) and Jodey Arrington (R-Texas).
According to the Semiconductor Industry Association, a trade organization that represents 98% of the U.S. chip industry by revenue, the bill would promote semiconductor research and innovation in the U.S., a critical part of America’s ability to create and lead state-of-the-art technologies today and in the future.
SIA said the U.S. semiconductor companies invest about one-fifth of revenue in R&D annually but the U.S. R&D credit is weak compared to global competitors and the requirement to amortize R&D expenses further weakens incentives for research in the U.S.
“At a time when federal funding for chip research has been flat as a share of GDP for years, even as the governments of global competitors are massively increasing their research investments, robust tax incentives for private sector research assume even greater importance,” said John Neuffer, president and CEO at SIA. “We applaud the bipartisan group of leaders in Congress for introducing this timely legislation to promote U.S. R&D, urge its swift enactment, and look forward to working with policymakers to advance semiconductor research in the United States.”
The American Innovation and Jobs Act will double the refundable R&D tax credit and extend it to more startups and small businesses allowing these companies to invest in developing new, innovation semiconductors that can lead to more jobs and a stronger economy, the SIA said.
