USA Passes Revised Aerospace R&D IncentivesNov 29, 2005 06:05 UTC by Defense Industry Daily staff
The US Senate recently passed bill S. 2020, which included provisions to encourage innovation in the US aerospace industry. The vote in favour was 64-33, approving a comprehensive tax bill that included an extension of a basic R&D tax credit in Section 214. It also included an AIA-advocated Alternative Simplified Credit (ASC) designed to increase incentives for high-risk defense and aerospace research, by permitting aerospace companies to claim a potential 12% benefit on Qualified Research Expenditures. The full House may act on the legislation before the end of the year.
Aerospace companies employ nearly 5% of the American manufacturing workforce, just as they do in Canada. The AIA claims that the maximum claim for ASC-related R&D under current law could be less than 4%, and that approximately 75% of all benefits claimed under the R & D credit go directly to wages and salaries. AIA and its member companies worked closely with Senate Finance Committee Chairman Charles Grassley [R-IA] and ranking Democrat Max Baucus [D-MT] on the issue.