WASHINGTON-The Telecommunications Industry Association blasted the lapse of the research and development tax credit, which helps fund the R&D budgets of U.S. telecom and high-tech equipment manufacturers. The credit expired in December.
The tax break is one of the most-favored tax breaks of the high-tech community. Although the credit may not be permanently gone, the lapse could cost companies, said TIA.
“Each time the credit has been allowed to expire, the research costs for each of these companies have also risen. With more than 75 percent of credit dollars used to provide high skilled, high-wage R&D jobs in America, the country’s long-term competitiveness is at stake. TIA believes it is time that Congress strengthens and makes the R&D tax-credit permanent now,” said TIA.
In October 2004, high-tech groups applauded President Bush signing into law legislation extending the R&D tax credit for 18 months. The credit was extended retroactively from July 1, 2004, through Dec. 31, 2005.
“The fact that this credit has once again been allowed to expire is very unfortunate. This action reflects our government’s lack of appreciation of the value of research and innovation. This credit was established in 1981 and has been extended 11 times. It will not encourage innovation and domestic research if companies lack the confidence that the credit will continue to be available to them. Without this confidence, companies increasingly will be forced to look elsewhere to conduct their research,” said TIA President Matthew Flanigan.
