By Sergio Bichao
A New Jersey congressman whose district is home to hundreds of research and development employees became the latest national lawmaker to call for a permanent extension to the federal R&D tax credit.
U.S. Rep. Leonard Lance, R-N.J. 7th District, announced his plans to introduce his bill during a stop Monday morning at Merck's pharmaceutical research site in Summit.
"I believe the R&D tax credit would contribute more to economic recovery and job creation if it were permanent, more generous and covered a wider variety of R&D," Lance said.
The tax credit, first introduced in 1981, was extended in December for the 14th time. Both Republicans and Democrats, including U.S. Rep. Rush Holt from New Jersey's 12th district and President Barack Obama, have called for the tax credit worth billions of dollars a year to become permanent, but efforts have fallen short.
Lance's bill also would offer a bonus credit to companies that manufacture their products in the United States.
While the tax credit would be enjoyed by any industry that spends money on research and development, the companies in New Jersey that stand to gain the most are those in the $30 billion pharmaceutical and medical technology industries, which spend a combined $8 billion a year in R&D.
These New Jersey companies employ more than 55,000 people, a third of whom work for those companies' R&D branches in the state, according to the industry group Health Care Institute of New Jersey (HINJ).
HINJ president Dean Paranicas, who joined Lance at Merck, said a permanent tax credit from Washington coupled with regulatory and tax reforms in Trenton would benefit the state.
"The primary thrust is about encouraging our companies to invest in New Jersey because there are opportunities in other parts of the county and other parts of the world," Paranicas said.