Kirsten Gillibrand: I'll push for permanent tax credit
The small technology companies getting their start at the Lennox Tech Enterprise Center represent industries from optics to software. Some are selling products now, while others are years away.
But one thing they almost all have in common is a strong reliance on federal research and development tax breaks to help cover their costs.
U.S. Sen. Kirsten Gillibrand stopped Monday at the Henrietta tech incubator as part of a sweep through upstate to push for changes in the nation’s tax laws to help spur more R&D efforts.
Section 41 of the U.S. tax code, the Research and Experimentation Tax Credit, has been kept alive since its original 1985 expiration date with 14 one- and two-year extensions.
Gillibrand said she is pushing for making the tax credit permanent, boosting the amount of the credit and simplifying the paperwork needed to apply for it. Spokeswoman Bethany Lesser said the senator will likely introduce the legislation within the next couple of months.
The tax credit’s lack of permanence has been a large hurdle for companies, Gillibrand said. “One of the biggest job killers is uncertainty.”
The complexity of applying for the credit also has been a challenge, as there are different paperwork requirements for companies founded prior to the mid 1980s, said David Veniskey, a partner at Henrietta accounting firm EFP Rotenberg. Simplifying the tax code would mean companies “would be less afraid to use it,” Veniskey said.
The credit can represent tens of thousands, even hundreds of thousands of dollars in savings for tech companies, said Jim Senall, president of High Tech Rochester, the organization that operates the Lennox Tech Center. And the tax benefit can be carried over to future years, so companies doing R&D but not yet generating revenues can still take advantage of it, said Senall.
The tax credit has been “pivotal” for most of the tech companies that have been created out of University of Rochester research, UR President Joel Seligman said.
And incentives for investment in R&D have to be a priority if the nation is to keep ahead of the rest of the globe in technology development, Seligman said.
To continue reading: http://rocnow.com/article/business/2011101110336
