Congressman Brian Higgins, Mayor Byron Brown Highlight Importance Of R&D For Region's Economic Future
After Tour of Honeywell, Senator Gillibrand Details Plans to Simplify, Expand, and Make Permanent the Research And Development Tax Credit
More Than 2,000 New York Companies Could Receive Tax Credit -- New Proposal Would Increase Private Investment in R&D By More Than $7.5 Billion
U.S. Senator Kirsten Gillibrand today announced a new proposal to spur innovation and job creation in Buffalo and Western New York. After touring Honeywell International, Senator Gillibrand detailed a new proposal to expand, simplify, and make permanent the Research and Development Tax Credit. With leading research institutions, cutting edge businesses, and highly-skilled entrepreneurs, New York is poised to lead America's high tech economy. More than 2,000 New York companies could take advantage of the R&D credit. Making it permanent could increase private investment in R&D by more than $7.5 billion across the country.
"My number one focus is on creating good-paying, family-supporting jobs," Senator Gillibrand said. "By supporting research and development, we can help our businesses become more competitive and create the high tech jobs of tomorrow. Our state is already home to the universities, businesses, laboratories, researchers and the bright minds we need for long-term economic strength. This proposal would leverage more private investment in our high-tech sector, creating good paying jobs right here in Buffalo and across Western New York."
"WNY has a long history and a great future as a leader in innovation," said Congressman Brian Higgins (NY-27), a co-sponsor of House legislation to make permanent the R&D tax credit. "Promising discovery is happening every day along the Buffalo Niagara Medical Campus and cutting-edge facilities like Honeywell. I thank Senator Gillibrand for her leadership on this issue. We need to give business the tools to grow jobs and demonstrate to the nation and the world the great possibilities when provided opportunity."
"I strongly support Senator Gillibrand's call for extending permanently the federal tax credits for research and experimentation, especially expanding the Alternative Simplified Incremental Credit," said Mayor Byron Brown. "Senator Gillibrand and I share the strong belief that our constituents need greater job opportunities, which will strengthen our economy -- locally, statewide and nationally. It is this type of effort, and leadership on the Senator's part, that will create the platform for greater job growth and employment opportunities in cities like Buffalo."
Expanding the R&D Tax Credit would create more than 162,000 jobs nationwide, according to the Information Technology and Innovation Foundation. More than four-fifths of the cost of the credit is spent directly on wages for researchers.
Senator Gillibrand's proposal would not only create R&D-based jobs, it would encourage companies to plan for the future, investing in new ways to streamline their processes and upgrade their products.
Senator Gillibrand's proposal would:
1. Expand the current credit by changing the formula to provide greater incentive for companies to increase investment
2. Simplify the current credit, which is highly complicated and confusing.
3. Make the new credit permanent, which would provide private companies with the confidence they need to make significant future investments in R&D.
The R&D Tax Credit has been extended 14 times by Congress, but has never been made permanent, making it difficult for companies to make plans based on the support and investment from the program. Additionally, the current process for claiming the credit is very complicated. The proposal pushed by Senator Gillibrand would make the credit permanent to maximize its benefits for domestic economic growth, and simplify the formula for claiming the credit to make it accessible to more companies, matching 20 percent of a company's increased research expenditures.
Thirty years ago, the U.S. was the global leader in providing tax incentives for private investment in R&D, but now the U.S. ranks 17th in the world among developed countries. Senator Gillibrand's proposal would expand America's effort to leverage R&D investment to support long-term economic growth.
Before the economic recession, R&D investment was already on the rise in New York. From 2003 to 2007, New York's research and development sector grew by 16 percent, creating a 28 percent increase in investment to a total of $10.9 billion in 2007, according to the National Science Foundation.