Senate Bill Contains Incentive for R&D

Aviation International News » January 2006
September 28, 2006, 4:18 AM

Before leaving for the Thanksgiving break, the Senate passed a bill with tax credits to encourage innovation in aerospace and defense research and development. Earlier, the House Ways and Means Committee approved a similar tax measure; at press time it was awaiting a floor vote.

The Senate voted 64-33 to approve a comprehensive tax bill that includes an extension of a basic R&D tax credit and includes an alternative simplified credit designed to increase incentives for high-risk defense and aerospace research.

The Aerospace Industries Association (AIA), which advocated the alternative simplified credit (ASC), sent to all 100 Senate offices an “R&D Tax Credit Alert” that summarized the technological and economic benefits the basic and simplified credits generate in the government-contracting sector. The ASC will permit aerospace companies to claim a potential 12-percent benefit on qualified research expenditures. Under current law, the maximum claim could be less than 4 percent.

“Congress recognizes that private-sector aerospace R&D makes an irreplaceable contribution to the modernization of the country’s military, space and air transportation systems,” said AIA president and CEO John Douglass. He explained that aerospace R&D fuels a competitive U.S. manufacturing base. Aerospace companies employ nearly 5 percent of the American manufacturing workforce, and 75 percent of all benefits claimed under the R&D credit go directly to wages and salaries.

Share this...

Please Register

In order to leave comments you will now need to be a registered user. This change in policy is to protect our site from an increased number of spam comments. Additionally, in the near future you will be able to better manage your AIN subscriptions via this registration system. If you already have an account, click here to log in. Otherwise, click here to register.