U.S. Sen. Sherrod Brown (D-OH) today visited the global headquarters of Owens-Illinois in Perrysburg to outline a new effort to retain and create new manufacturing jobs in Ohio. Brown toured the company's research lab and met with workers, then joined company leadership to discuss his bill, the 21st Century Investment Act of 2012, which would expand the research and development (R&D) tax credit and support nearly one million good-paying American jobs. Owens-Illinois recently announced plans to open a new, 18,000-square-foot R&D center in northwest Ohio that will create 45 jobs. More than 15 countries currently outpace the U.S. in promoting R&D through their tax codes.
"In order to keep American manufacturing moving forward, we need to take action to promote the innovation and advances that protect jobs at places like O-I. Rather than create tax incentives for companies that ship jobs overseas, we should be finding ways to grow and create jobs here," Brown said. "We know that when American manufacturing moves to other countries--we don't just lose production, we also forgo innovation--which is particularly dangerous as countries like China continue to invest heavily in R&D. My bill would spur domestic research by simplifying, enhancing, and making permanent the current R&D tax credit--making it easier for companies like O-I to develop new technologies by allowing them to take advantage of the credit to help offset some of the costs of new research. With a stronger R&D tax credit, more companies can expand and hire workers right here in Ohio."
The 21st Century Investment Act of 2012 seeks to boost businesses' incentives to invest in research and development of new products, especially by manufacturing firms, by enhancing both the current research tax credit and the deduction for domestic activities production income. The bill is aimed at promoting the growth and competitiveness of manufacturing firms with domestic operations by providing financial incentives to invest in domestic research, and to produce the innovative products that result from that research.
The R&D Tax Credit provides businesses and individuals with a tax credit equal to a portion of their expenditures on research and development - including labor costs. The qualified domestic production tax credit offers firms a credit against a portion of their domestic manufacturing expenses.
Specifically, the bill would:
Permanently extend the R&D tax credit.
Raise the rate of the regular credit from 20 percent to 25 percent for research performed within the United States.
Increase the Alternative Simplified Credit formula from 14 percent to 20 percent.
Increase for ten years the domestic manufacturing tax credit from 9 to 15 percent.