Support for the Permanent Extension of the R&D Tax Credit

The Council for Regional Information Technology Associations (CRITA), the largest national organization representing over 20,000 Information Technology companies across the United States, supports making permanent the "Research and Experimentation Tax Credit," also known as the R&D Tax Credit.

Research and development is the heartbeat of the Information Technologies industry, and has been vital to the growth of the knowledge sector of the U.S. economy. Moreover, the private sector is increasing its share of the total national R&D effort. While the U.S. Congress has temporarily extended the credit a number of times, the credit is still not permanent.

In an increasingly competitive global marketplace, many other nations offer lucrative incentives to companies with expanding research programs. Over the last 17 years, the R&D credit has been an incentive to U.S. businesses to keep that product research and development in the U.S. By helping to keep more money in R&D activities and by helping American companies compete with more favorable tax rules and lower production costs abroad, the credit has helped create and retain high-skilled, high-paying jobs in the United States and established the U.S. as a world leader in developing new technologies.

The uncertainty of the credit affects company decision on siting and expanding R&D facilities and operations. Given the imperative of continuous innovation in the face of substantial investment risk, a permanent credit would be predictable incentive encouraging companies to boost private sector R&D expenditures.

CRITA supports the permanent extension of the R&D Tax Credit to help the technology sector in the United States keep increasing its research and development investments in the long-term without fear that the credit suddenly may disappear.