iBIO is proud to sign onto a letter urging immediate legislative action to repeal provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that went into effect in 2022. The American Innovation & Jobs Act of 2023 (S. 866) bipartisan legislation sponsored by Senators Maggie Hassan (D-NH) and Todd Young (R-IN) would restore parity between domestic and foreign research and experimentation expenses with respect to tax deductions for amortization.
For many of our members, R&D is their lifeblood. These research-intensive small and large biotechnology companies take enormous risks to develop treatments for diseases that have no cures or treatments, making investments in R&D essential for them to stay competitive. However, under the TCJA’s modifications to Section 174 of the US tax code, businesses can no longer deduct research and experimentation expenses in the same taxable year they are incurred; instead, they must amortize these deductions over five years for domestic expenditures or 15 years for foreign expenditures.
This mandate diverts much-needed funds away from small R&D-intensive companies at a time when investment should be incentivized the most — potentially jeopardizing the development of future treatments and negatively impacting economies where these companies are established. By passing S. 866, Congress has an opportunity to right this wrong and provide relief to our members who continue their tireless effort to drive global biomedical innovation forward in spite of current economic challenges.
We urge immediate passage of S. 866 so that our member companies may continue innovating — bringing critical life-saving medicines, treatments, diagnostics, technologies and services closer to patients who need them most — without fear of being stifled by overly burdensome tax regulations.