Senator Coons Introduces Bill To Facilitate Business Innovation
On Tuesday, Senator Coons introduced the Startup Innovation Credit Act, intended to make it easier for new companies to invest in research and development as well as create more jobs.
Young companies--those fewer than five years old--are responsible for the majority of new American jobs. However, the existing R&D tax credit often overlooks these companies, since younger companies generally don’t have enough income tax liability to qualify. This new bipartisan legislation, co-sponsored by Republicans Mike Enzi and Marco Rubio as well as Democrat Chuck Schumer, aims to fix this oversight by allowing small, young companies to apply the tax credit to their payroll tax liability.
Any company less than five years old and with gross receipts less than $5 million will be eligible for the new tax credit, enabling them to reduce their employer-side payroll tax bill by up to $250,000.
By rewarding investment in research and development while reducing the tax burden associated with hiring new workers, this bill will encourage the next generation of American small businesses to innovate, grow and compete in the global marketplace.
For instance, Bob Dayton, President of Delaware Bio, said,
The Startup Innovation Credit will create jobs and speed up innovation, helping early-stage companies like many of those that belong to Delaware Bio...Startups that are investing in innovation have enormous potential to grow and create jobs, and the Startup Innovation Credit is a creative way to help nurture that potential when it will have the greatest impact.
The companion bill will be introduced in the House next week by Republican Congressman Jim Gerlach.