ITAA Says R&D Tax Credit Critical In Turbulent Economy
Congress' failure to reauthorize the incentive plan puts $13 billion and more than 10,000 jobs at risk, the IT trade group warns.
The research and development tax credit is more important than ever, according to the Information Technology Association of America.
The group said the United States needs to pass an emergency economic package to stabilize the financial markets and must also renew key tax measures, including the R&D credit.
"A frozen credit market is a grave threat to our companies," ITAA president and CEO Phil Bond said in a statement Wednesday.
In addition to recent market volatility and the ongoing credit crisis, technology companies have suffered from a lapse of the R&D credit. Last December, the U.S. Congress allowed the provision to end, making it difficult for technology companies and other businesses to forecast business expenses and financial results.
ITAA said the nine-month lapse has put more than $13 billion and more than 10,000 jobs at risk.
"Research and development benefits the economy via enhanced spending by companies when the tax credit is in place and from the new products that result," the ITAA said in a statement. "These generate new investments in capital equipment, additional jobs and growth in business and consumer spending."
Bond said that the government must extend the R&D tax credit, especially in the current economic environment. "Leaving town without a two-year extension is an invitation to companies to take their R&D -- and related jobs -- to foreign shores," he said.
The ITAA represents about 350 corporate members in the IT and electronics industries, providing market research, developing standards, and promoting business development, networking, and public advocacy. Earlier this year, it merged with the Government Electronics and Information Technology Association.