On Friday, Chair of the House Ways and Means Committee, Jason Smith, introduced the American Families and Jobs Act, which includes a reversal of the amortization of Section 174. As of this year, business expenses for R&D activities are no longer immediately deductible, causing many innovative businesses to shoulder crippling and often fatal tax burdens. Reversing amortization would essentially save thousands of businesses, millions of jobs, and put the country back on path to being a leader on innovation.
“It’s gratifying that Chairman Smith recognizes the dire situation that small businesses in America face as a result of this ill-conceived change in the tax law. The provision – intended to be a stop gap, temporary solution by congressional negotiators six years ago – has become a financial dagger aimed at the heart of innovative small businesses in America. If there was ever an innovation killer for the small business job creation engine in America, this is it. With this important first step, Chairman Smith has kicked off the urgent process to eliminate this toxic provision and unleash small and mid-sized businesses to create, innovate and grow again,” said alliantgroup Senior Vice President Rick Lazio.
As the dust starts to settle in Congress after the raising of the debt ceiling, there are still question marks on what Capitol Hill can actually get passed. The one thing both House and Democrats and Republicans have found common ground on has been reversing amortization of 174. In March, Senate Bill S.866 was introduced with 31 bipartisan cosponsors, solely to fix 174.
