BIO Sends Letter to Congressional Leaders on Need to Repeal Harmful R&D Amortization Provision
June 15, 2022
The Biotechnology Innovation Organization (BIO), BIO members and State affiliates urge immediate legislative action to repeal the harmful R&D amortization provision that went into effect earlier this year. The 2017 Tax Cuts and Jobs Act (TCJA) changed the longstanding deduction for R&D expenditures to a mandatory five-year amortization for domestic R&D and fifteen-year amortization for foreign R&D, with the effective date delayed until 2022. As has been noted by companies and industries across the economy, the R&D amortization provision will have a negative impact on American innovation and high-paying R&D jobs. For the biotechnology industry specifically, it will divert much-needed funds away from small R&D-intensive companies, potentially doing long-term damage to the development of the future treatments and ultimately limiting the pipeline of treatments and products that patients and consumers are relying on our industry to develop; technologies that help heal, fuel, and feed the world.
For this reason, legislation should be enacted to restore the expensing of R&D expenditures retroactive to January 1, 2022.
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The Biotechnology Innovation Organization (BIO), BIO members and State affiliates urge immediate legislative action to repeal the harmful R&D amortization provision that went into effect earlier this year. The 2017 Tax Cuts and Jobs Act (TCJA) changed the longstanding deduction for R&D expenditures to a mandatory five-year amortization for domestic R&D and fifteen-year amortization for foreign R&D, with the effective date delayed until 2022. As has been noted by companies and industries across the economy, the R&D amortization provision will have a negative impact on American innovation and high-paying R&D jobs. For the biotechnology industry specifically, it will divert much-needed funds away from small R&D-intensive companies, potentially doing long-term damage to the development of the future treatments and ultimately limiting the pipeline of treatments and products that patients and consumers are relying on our industry to develop; technologies that help heal, fuel, and feed the world.
For this reason, legislation should be enacted to restore the expensing of R&D expenditures retroactive to January 1, 2022.