President Bush signed into law the economic stabilization bill which included renewal of the research and development (R&D) tax credit, a top legislative priority for SEMA. The R&D tax credit was extended through 2009, retroactive to its expiration on December 31, 2007. The new law increases the alternative simplified credit from 12% to 14% for the 2009 tax year and repeals the alternative incremental research credit for the 2009 tax year.
Lawmakers estimate that businesses will take advantage of $19 billion in tax credits over the next 10 years. The credit offsets R&D costs for companies that invest time and money before they are able to produce new products. The research must be technological in nature and aimed at introducing a new or improved product based on function, performance, reliability or quality.
Money may be spent on both in-house and outside research. The credit is generally 20% of funds spent above the "base-period amount."
For more information, contact Brian Duggan: firstname.lastname@example.org.