Rep. Rush Holt, D-N.J., has introduced legislation to encourage small business investment and job creation by expanding the research and development tax credit.

Holt’s legislation, known as the “Create Jobs by Expanding the R&D Tax Credit Act of 2010,” would temporarily boost the most common form of the federal R&D tax credit, the Alternative Simplified Credit for research and development, by expanding it from 14 to 20 percent. Expanding the credit could create 162,000 jobs in the short-term and increase the GDP by $90 billion, according to a report by the Information Technology and Innovation Foundation. In addition, Holt’s legislation would make the credit more useful for start-up businesses by allowing them to sell their unused tax credits, modeled after a successful New Jersey program.

“The strength of our economy comes from small businesses and from innovation. Both have suffered during the economic downturn,” said Holt in a statement. “As we move to a recovery, we need to ensure that we invest in our small businesses and in innovation, and the bills I have introduced would bolster each.”

Another bill that Holt has introduced, the “Creating Jobs from Innovative Small Businesses Act of 2010,” would encourage small business investment by establishing a temporary 20 percent tax credit for investments in research-intensive small businesses. This legislation builds on a successful state initiative in New Jersey and 17 other states, including North Carolina and Wisconsin

Last year, Holt helped pass legislation in the House — awaiting action in the Senate — that would eliminate fees on SBA loans and increase loan guarantees to increase lending to small businesses.

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