Congress should expand the refundable R&D credit to allow pre-profit start-ups to cover payroll taxes.

Partly Done: Expand the R&D Credit for Pre-Profit Start-Ups

Congress should create tax credits for SMEs and original equipment manufacturers (OEMs) to encourage investment in SME and supplier digitalization. 

To Do: Create Tax Credits for SME and Supplier Digitalization

Congress should at least double the regular R&D tax credit to 40 percent and the Alternative Simplified Credit to 28 percent, since U.S. R&D tax credit support currently ranks 31st out of 28 OECD nations and the four BRIC economies.

To Do: Double the R&D and Alternative Simplified Credits

Congress should allow small research companies to carry their net operating losses forward even after a change in ownership.

To Do: Allow Small Research Companies to Carry Forward Net Operating Losses

Congress should create a Super CHIPS Tax Credit for advanced-industry R&D and production firms’ purchases of machinery, equipment, and buildings.

Partly Done: Create a Super CHIPS Credit

The net result of this legislation would be to increase support for research by start-ups without breaking the link between the credit and actual taxes paid. This should significantly bolster the U.S. innovation ecosystem.

ITIF Supports Legislation to Boost the R&D Tax Credit for Start-Ups

Congress should focus the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) programs on the highest-impact opportunities with the greatest potential to be commercialized.

To Do: Focus the SBIR and STTR Programs on the Highest-Impact Opportunities

U.S. tax policy needs to prioritize innovation and competitiveness—especially as China rapidly gains ground as a leading innovator in advanced industries.

Twelve Tax Reforms to Spur Innovation and Competitiveness

Congress should allow investors in small research companies that have net operating losses to declare the portion that was associated with qualifying research activity.

To Do: Pass the Support the Small Business R&D Act

Recommendation

Details

Editors’ Recommendations

A Policymaker’s Guide to Smart Manufacturing

Related

Partly Done: Expand the R&D Credit for Pre-Profit Start-Ups

To Do: Create Tax Credits for SME and Supplier Digitalization

To Do: Double the R&D and Alternative Simplified Credits