Senator Hatch Introduces Tax Bill To Provide A Boost To Research-Based Companies

June 8, 2009 -- WASHINGTON -- Senator Orrin Hatch (R-Utah) today introduced legislation that would extend and expand the research tax credit, which would provide a boost to thousands of research-based companies in Utah. Hatch, a senior Republican on the Senate Finance Committee, was joined in the bill's introduction by Finance Committee Chairman Max Baucus (D-Mont.).

“If we want to strengthen our economy and create jobs, both in the near-term and in the longer run, it is vital that we maintain and even enhance our position as the world leader in innovation,” Hatch said. “One proven way to foster strong economic growth and job creation is to increase productivity, and most productivity gains are derived from technological advances. We should never forget that our nation’s future economic health depends on the innovations of today.”

Article continues below...

Since its enactment in 1981, the research tax credit has become a powerful and effective incentive for firms to increase research spending. With the credit scheduled to expire December 31, 2009, Hatch’s bill would make the credit permanent and enhance the so-called "simplified alternative credit," which has provided a more direct incentive to innovation-oriented companies. Added as an alternative to the traditional research credit in 2006, the simplified credit addressed changes in business models and economic circumstances that had prevented some businesses from fully utilizing the research credit.

“Higher productivity means increased profits, higher returns on investment, more jobs, and higher wages,” Hatch said. “Utah is a perfect example. In just the life sciences industry segment alone, the Beehive State is home to more than 500 companies employing more than 19,000 people. For all high-technology firms, whether in life Science, information technology or in one of the other high-tech sectors in which Utah is abounding, the common link is the need for continued research and development. Technology is one of Utah’s leading exports, and many firms throughout the state profit from the innovations that are developed in Utah.”

Hatch, who was recently named chairman of the Senate Republican High Tech Task Force, has been a champion of the research credit for many years.

“Research and development is clearly the lifeblood of not only Utah’s, but the nation’s economy,” Hatch said. “And as we increase productivity through research and innovation, we will be in a better position to deal with our looming budgetary challenges. We need a strong and permanent research credit to encourage the kind of growth that will create these good jobs in Utah and elsewhere across the nation.”

Source: Senator Orrin Hatch