WASHINGTON, Dec. 8 /PRNewswire/ -- Biotechnology Industry Organization
(BIO) President & CEO Jim Greenwood today issued the following statement
regarding passage by the House of the Tax Relief and Health Care Act of
2006 (H.R. 6111):
"The Tax Relief and Health Care Act passed today by the House renews
and strengthens a critical and effective federal incentive that is both
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. We urge the Senate to also pass this important legislation.
"If passed by the Senate, the act will extend the R&D tax credit
through the end of 2007 and strengthen it by creating a new Alternative
Simplified Credit as an option for companies in 2007. Additionally, the
extension of the credit is made retroactive for research expenses incurred
beginning on January 1, 2006, thus providing for a seamless extension. The
provision is estimated to save taxpayers $16.3 billion over the next five
years
"Because the credit expired at the end of 2005, failure to extend and
strengthen the R&D credit before the close of the 109th Congress would 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 would 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 United States 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 extension of the R&D
credit will help biotechnology companies conducting research in the U.S.
compete and win in the global economy."
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.
SOURCE Biotechnology Industry Organization
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Related links:
http://www.bio.org/
CONTACT:
Paul Winters of Biotechnology Industry
Organization, +1-202-962-9237
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