FOR IMMEDIATE RELEASE
August 1, 2024
Contacts:
Andy Barnes, abarnes@cebn.org, Tel: 202-785-0507, ext. 1503
Washington, D.C. – Lynn Abramson, President of the Clean Energy Business Network (CEBN) provided the following statement in response to the Senate failing to advance the Tax Relief for American Families and Workers Act. This legislation includes a retroactive restoration to the Sec. 174 R&D tax deduction and would allow for immediate expensing on domestic R&D expenses from 2022-2025:
“The failure to resolve this issue with the R&D tax deduction is very disappointing and will negatively impact America’s small business innovators in cleantech and beyond. We urge the Senate to find another path forward to restore the full value of the R&D tax deduction as soon as practicable.”
For nearly 70 years, businesses could fully deduct R&D expenses in the first year incurred. Since 2022, this policy lapsed, and R&D firms have faced disproportionately high tax burdens forcing many to lay off employees, cancel projects, or file for bankruptcy. A tax package restoring the Sec. 174 deduction received overwhelming bipartisan support in the House of 357 Representatives but failed to advance through a procedural vote today in the Senate.
The U.S. is one of just two nations that taxes R&D expenses. Based on the R&D tax deduction alone, EY projects U.S. R&D spending will drop up to $10.1 billion annually and cost 58,600 jobs each year. Thousands of innovative companies are now facing bankruptcy; 35% of companies surveyed that use this deduction reported needing to borrow money to pay new taxes and 19% might go bankrupt.
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The Clean Energy Business Network (CEBN) is the small business voice for the clean energy economy, working to enhance opportunities for clean energy providers through policy support, market and technology education, and business development assistance.
