USA Passes Revised Aerospace R&D Incentives
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.