US corporate R&D tax credit plan dropped

A crestfallen tech group yestereday petitioned the US Congress to take up separately a measure that would have made permanent corporate R&D (research and development) tax credits that now have to be renewed periodically.

          A crestfallen tech group yestereday petitioned the US Congress to take up separately a measure that would have made permanent corporate R&D (research and development) tax credits that now have to be renewed periodically.

          At the eleventh hour, lawmakers last weekend dropped the R&D tax credit language from US President George Bush's mammoth tax package.

          The Arlington, Virginia-based Information Technology Association of America (ITAA) urged lawmakers to vote on a standalone measure to make the R&D tax credit permanent.

          Because companies have not been assured that R&D tax credits will remain in place, some have put off programmes, especially long-term projects, ITAA executives warn.

          Language that would have made the tax credit less fleeting were included in the tax bill right up until a final conference report was passed over the weekend.

          "Congress still can take the opportunity to keep America's competitive edge sharp by passing the permanent R&D tax credit this spring," says ITAA president Harris Miller in a statement.

          Miller points out that the tax credit enjoyed enough support to pass both chambers.

          ITAA and other technology associations such as AeA (formerly the American Electronics Association) have lobbied hard for a permanent tax credit.

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