U.S. Senators Todd Young and Maggie Hassan have introduced the American Innovation and Jobs Act, a legislative effort aimed at bolstering research and development (R&D) by small businesses and startups in the United States. The bill seeks to enhance America’s competitive edge against global rivals like China, which are heavily investing in R&D.
Historically, companies investing in R&D could claim a tax credit or deduct their investments, facilitating the creation of innovative products that drive job growth and economic strength. A provision from the 2017 Tax Cuts and Jobs Act allowed full expensing of R&D but expired in 2022. The new bill aims to make this provision permanent, allowing businesses to retroactively benefit from deductions during the years when full expensing was unavailable.
Senator Young emphasized the importance of maintaining U.S. leadership in scientific and technological innovation: “The United States is locked in a competition to ensure we maintain our position as the global leader… Our legislation would incentivize job-creating R&D activity… Congress must pass this legislation.”
Senator Hassan highlighted how the bill supports small businesses facing rising costs: “As many small businesses struggle with rising costs, this bipartisan legislation cuts taxes for small businesses that invest in innovation…”
The American Innovation and Jobs Act has garnered support from several senators across party lines, including James Lankford, Jeanne Shaheen, Steve Daines, Mark Warner, John Barrasso, Jacky Rosen, Thom Tillis, Gary Peters, Roger Marshall, Alex Padilla, Tommy Tuberville, Patty Murray, John Kennedy, Amy Klobuchar, Pete Ricketts, Mark Kelly, Katie Britt, Tim Kaine, Shelley Moore Capito among others.
Endorsements for the legislation come from organizations such as the R&D Coalition which includes Business Roundtable and National Association of Manufacturers.
Senator Young previously introduced similar legislation in 2021 and has been vocal about the critical role of R&D investment for national security.
Full details of the proposed legislation are available online.
