The R&E Credit (Baucus)
The Honorable Max Baucus
United States Senate
Washington, DC 20510
Dear Senator Baucus:
On behalf of the U.S. Chamber of Commerce, the world's largest business federation, representing more than three million businesses and professional organizations of every size, sector and region, I am writing to urge your support for a permanent extension of the research and experimentation tax credit (the "R&E credit") with the modifications that are contained in H.R. 463 and S. 664. The R&E credit, which is scheduled to expire June 30, 2004, is beneficial because it fosters economic growth and provides needed certainty for companies.
A permanent R&E credit will provide needed benefits for the U.S. economy. The R&E credit will help ensure increased technology investments in the U.S, in turn leading to development of new products accompanied by expansion in employment required to manufacture, sell, and service those goods.
A permanent R&E credit will also provide a greater degree of certainty to small, medium, and large companies in undertaking new technological endeavors. This certainty will help companies make critical long-term investment decisions. By making the R&E credit permanent companies will be able to rely on the credit throughout the term of their multiyear projects.
Furthermore, the credit should also be strengthened so that it provides an incentive for even more businesses engaged in significant research to invest in R&E in the United States. An increase in the Alternative Incremental Research Credit (AIRC) rates and a new elective alternative credit formula, as proposed in H.R. 463 and S. 664, would provide such an incentive.
In conclusion, the Chamber believes that R&E credit should be strengthened and made permanent. I thank you in advance for your consideration of this matter.
R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce