While it is appropriate and essential that federal research be redirected to discovering safe treatments and vaccines to treat and eradicate COVID-19, it is also important that federal tax and budget policy renew investments in private sector research and development (R&D) to ignite innovation and create jobs, especially as the United States emerges from the COVID-19 national emergency. TechNet supports:
· Establishing a national Technology Directorate to lead investment and research in artificial intelligence and machine learning in: fifth-generation telecommunications; high performance and quantum computing; robotics, automation, and advanced manufacturing, including for semiconductors; and more.
· Designating regional technology hubs to award federal funding for comprehensive investment initiatives that position regions across the country to be global centers for the research, development, and manufacturing of key technologies.
· Allowing high-growth startups to access up to $25 million in net operating loss (NOL) carryforwards and R&D credits, providing fast and efficient capital availability to support companies through the downturn that will be offset over time through higher tax payments once they become profitable. Additional R&D credits should be given to private sector R&D undertaken to fight COVID-19.
· Preserving the ability to deduct R&D expenses in the year incurred.
· Improving the 2017 tax law’s base erosion and anti-abuse tax (BEAT) provision by allowing the add-back of the R&D Tax Credit for regular tax purposes. Current law requires that, beginning in 2026, regular tax liability be reduced by the R&D Tax Credit, which could result in many innovative companies effectively losing all or a substantial portion of their R&D credits.
· Policies that encourage the repatriation of U.S. intellectual property to spur U.S.-based R&D and innovation that grows the economy and manufacturing base.
· The expansion of the R&D Tax Credit to all businesses to offset payroll taxes and spur innovation and investment.
· Allowing businesses to monetize certain tax credits to provide flexibility when needed.
· Support policies that allow companies to manage balance sheets through share repurchases, which allow a return of excess cash to investors after making necessary investments in people, research, and development.