BIO Urges Congress to Extend the Research & Development Tax Credit Prior to Adjournment

Search Blogs that Mention this News Release
Click this link to view linked Bookmarking Services
Click this link to view linked Blogging Services
BIO Urges Congress to Extend the Research & Development Tax Credit Prior to Adjournment
  Absence of Federal Credit Discourages New Research Projects in the U.S.

    WASHINGTON, Nov. 14 /PRNewswire/ -- In a joint letter to Congressional
leaders, Biotechnology Industry Organization (BIO) President and CEO Jim
Greenwood, AdvaMed President and CEO Stephen J. Ubl, and 32 BIO state
affiliate organizations today urged Congress to act immediately to extend
and strengthen the research and development tax credit (R&D credit) before
adjourning:
    "The R&D credit, which has been in place for more than 25 years,
expired at the end of 2005. It is a critical and effective federal
incentive, vital to maintaining U.S. competitiveness, and one of the
primary reasons that the United States currently leads the world in
bioscience research and development. For many bioscience and medical
technology companies now operating on a global basis, the decision is not
whether to invest in research and development, but in which of their
facilities the project will be located. The absence of a long term and
dependable federal credit creates a significant disincentive for locating
new research projects in the U.S.
    "Failure to extend and strengthen the R&D credit before the close of
the 109th Congress will have serious negative consequences for American
companies. If the R&D credit is not retroactively extended and strengthened
by Dec. 31, 2006, companies will be required to state their annual year-end
earnings reflecting the full impact of a higher tax rate due to the fact
that the credit has lapsed. As such, failure to immediately and
retroactively extend the R&D credit prior to adjournment will adversely
impact annual earnings-per- share for all companies who would have
otherwise claimed the credit. For highly research-intensive bioscience and
medical technology companies, particularly those that must raise funds in
the capital markets, this could seriously destabilize their position in the
marketplace.
    "Additionally, since the inception of the R&D credit, numerous states
have enacted their own incentives pegged to the amount claimed under the
federal credit. State governments increasingly realize that they are no
longer competing just within the U.S. to attract research activity.
Governments around the world have created the necessary infrastructure and
are now offering U.S. companies highly competitive and valuable long-term,
contractual incentives to attract new investments in research and related
manufacturing facilities."
    The full text of the letter can be viewed at
http://www.bio.org/tax/r&d/ .
    BIO represents more than 1,100 biotechnology companies, academic
institutions, state biotechnology centers and related organizations across
the United States and 31 other nations. BIO members are involved in the
research and development of healthcare, agricultural, industrial and
environmental biotechnology products.
    Upcoming Events

      * BIO Drug, Device & Diagnostic Summit
        December 4-5, 2006, San Diego, CA

      * BIO CEO & Investor Conference
        Feb. 12-14, 2007, New York City

      * 2007 World Congress on Industrial Biotechnology and Bioprocessing
        March 21-24, 2007, Orlando, FL

      * BIO International Convention
        May 6-9, 2007, Boston, MA
SOURCE Biotechnology Industry Organization
http://www.bio.org
CONTACT:
Stephanie Fischer of Biotechnology Industry
Organization, +1-202-312-9263