The 2017 Tax Cuts and Jobs Act (TCJA) modified Section 174 of the US tax code, so starting in 2022, businesses could no longer deduct research and experimentation expenses in the same taxable year. Now companies are forced to amortize such deductions over five years for domestic expenditures or over 15 years for foreign expenditures. The impact is a significant reduction of much-needed funds away from small R&D-intensive companies. Redirecting funds from research to paying unexpected tax bills threatens to jeopardize the development of future treatments, cures, and scientific discoveries that could benefit patients.
In support of its member companies, the Oregon Bioscience Association partnered with the national BIO and AdvaMed organizations to lobby federal legislators on this key issue. Last spring Oregon Bio company members and staff flew to Washington, DC to discuss the local economic impact with Congressional legislators and staff. BIO continues to organize and attend briefings to educate on this issue. There continues to be strong bipartisan support for reversing this situation, and multiple legislative proposals have been put forth.
Thanks to our collective and consistent advocacy efforts, there are ongoing productive conversations in Congress to come to an agreement on how to address this issue. Negotiators are actively working to build support for including such a solution in a policy package that Congress will consider early next year.
Congress is returning to their districts for the holiday season. This is a great opportunity to maintain the momentum for a deal. Quoting BIO,
“…a weakened biotech ecosystem threatens the development of treatments for both chronic and rare diseases such as Alzheimer’s, Parkinson’s, obesity, cardiovascular diseases with significant unmet need, and rare diseases.
This article was contributed by Dr. Sandra Shotwell, TMT-Rx
Call to action! We encourage you to reach out to your elected officials and remind Congress this is a time-sensitive issue for our industry. Click here to find your elected officials.
Three action items to consider:
- Brief call/email. Call or write your member of Congress with a brief message. Draft talking points for either a phone call or email are below for your consideration.
- Company Site Visits: If you have the capacity, we encourage you to invite your elected official and/or their staff to a site visit during the first week of January so they can see first-hand how R&D amortization impacts your business and the local biotech ecosystem.
- Check your elected official’s website or call the local district office’s main phone number to see if they have an official “meeting request form” or staff contact.
- District Office Visits: Ask your elected official or their staff to meet with you in their local district office to explain how R&D amortization impacts your company.
- Check your elected official’s website or call the local district office’s main phone number to see if they have an official meeting request form or best staff contact.
Hello! My name is ____. My zip code is _____. I am calling to urge [Senator/Representative Name] to pass a legislative fix to R&D amortization when Congress returns in January. Please tell Congressional Leadership [Senators: Schumer/McConnell, Representatives: Johnson/Jeffries] this is a top priority issue for your boss and their constituency. The only way to reverse this slowdown in R&D spending is for Congress to restore immediate R&D expensing when Congress returns in January. The current January 19 government funding bill deadline is the best chance to fix this issue. [optional: 1-2 sentences how R&D amortization impacts you personally]
Thank you for passing along this message.
Hello! My name is ____. I work for ___[company name]_______, located in __[City/Town]_. I am writing to urge [Senator/Representative Name] to pass a legislative fix to R&D amortization when Congress returns in January. Please tell Congressional Leadership ____ [Senators: Schumer/McConnell, Representatives: Johnson/Jeffries]_____ this is a top priority issue for your constituency. [optional: 1-2 sentences how R&D amortization impacts you personally] The only way to reverse this slowdown in R&D spending is for Congress to restore immediate R&D expensing when Congress returns in January. The current January 19 government funding bill deadline is the best chance to fix this issue. This is a time-sensitive issue for the biotech community. Innovation cannot be switched on and off. Thank you for your attention to this matter and please feel free to reach out if you or your staff have any additional questions.