Archive for R&D Credit Services

House Votes To Reinstate The Research And Experimentation Tax Credit

On Friday, May 9th The U.S. House of Representatives voted 274-131 to reinstate the Research and Experimentation Tax Credit (hereinafter “RTC”) under § 41 of the Code which recently expired on December 31, 2013.

As a background, the RTC was first enacted in 1981 into the Code as a temporary provision at a time when research and development based jobs were alarmingly declining throughout the United States (hereinafter “U.S.”) due to U.S. based companies moving these jobs overseas. Lawmakers stated the lapse-and-revive cycle of the past 33 years has prevented companies from relying on it and thwarted its incentive effect. “Businesses can’t grow and invest when the tax code is riddled with instability and uncertainty,” Ways and Means Committee Chairman Dave Camp, a Michigan Republican, proclaimed on the House floor Read More

Written by | Posted in Federal • R&D Credit Services

Dealing With Research And Development Incentives In Washington

In the most recent Washington legislative session, lawmakers declined to extend several important research and development (R&D) tax incentives in Washington. The High Technology B&O Tax Credit for R&D Spending and the High Technology Sales and Use Tax Deferral/Waiver, will expire December 31, 2014. While there is some possibility these incentives will be restored in 2015, taxpayers should proceed as if these incentives will expire permanently at December 31, 2014.

Many taxpayers know of the high technology B&O tax credit, which provides a B&O tax credit of roughly 1.5% of taxpayer’s research and development expenditures. Although not as well known, the high technology sales and use tax deferral is also a valuable incentive to high-technology businesses investing in research and development facilities. Although the Read More

Written by | Posted in R&D Credit Services

Will It Happen this Year? A Permanent R&D Credit

The federal income tax credit for certain R&D expenditures (primarily wages and supplies) has been a temporary provision since first enacted in 1981 (it first expired in 1985 and has been extended about 14 times since). The temporary credit seems odd considering the following:

• Every President and probably most legislators since 1985 have called for a permanent credit.

• Unlike most other credits, there is economic justification for the credit beyond only incentivizing R&D in the U.S. There are spillover effects from a company’s R&D activity and the credit helps compensate for them. Read More

Written by | Posted in R&D Credit Services

House Ways And Means Committee Approves Permanent Extension of Research & Experimentation Tax Credit Amongst Other Expired Business Tax Provisions

On April 29th, The House Ways and Means Committee approved six separate bills to permanently extend certain expired business tax provisions. These bills specifically address the research and experimentation tax credit (H.R. 4438); ‘look-through’ treatment for controlled foreign corporations (CFCs) (H.R. 4464); the subpart F exceptions for active financing income (H.R. 4429); increased section 179 ‘small business’ expensing limits (H.R. 4457); a reduced recognition period for S corporation built-in gains (H.R. 4453); and basis adjustments to stock of S corporations making charitable contributions of property (H.R. 4454).

These permanent ‘tax extender’ bills, approved by the Ways and Means Committee without revenue offsets, are estimated by Joint Committee on Taxation (JCT) staff to reduce federal Read More

Written by | Posted in Federal • R&D Credit Services • Tax Policy • Tax Provision/Tax Reporting

Comparison of Holding Regimes: Latvia vs. Ireland – 4:4!

What is common to Facebook, LinkedIn, EA, Apple and PayPal? Most of you already know or suspect – first, these businesses work in e-commerce; but what is the key? They use companies in Ireland; the first two have even established their group headquarters in Ireland. A respected Irish tax consulting company highlighted the 10 most significant advantages of this globally popular holding-company jurisdiction in a recent article. In considering these 10 Irish advantages, using sports terminology I challenge you to a game: which holding regime scores more (is better) – the Latvian one or the Irish one?

1. CAPITAL GAINS TAX EXEMPTION – LATVIA 1:0 IRELAND

This exemption has been implemented in both countries, but in Ireland it has been limited by several preconditions. For example, only EU or residents in Ireland of tax treaty Read More

Written by | Posted in Europe, Middle East • R&D Credit Services • Transfer Pricing

The Senate Finance Committee Passes Tax Extenders For 2014 & 2015

On April 3rd, the Senate Finance Committee overwhelmingly approved the Expiring Provisions Improvement Reform and Efficiency Act of 2014 (hereinafter “EXPIRE”) with a strong bipartisan vote, setting the stage for Congress to address. The House Ways and Means Committee is expected to have its own extension package later this month. To that end and as a caveat, it is not certain whether any or all of these incentives will become law.

The bill extends many long awaited business tax extenders that originally expired on December 31, 2013 and modifies other certain tax provisions. Some of the key temporary tax benefits in this EXPIRE bill includes:

• 50% Bonus Depreciation & §179 Expensing Thresholds Return: The 50% bonus Read More

Written by | Posted in Federal • R&D Credit Services • Real Estate • Tax Provision/Tax Reporting

The Senate Finance Committee Agrees to Expand the Federal-Level Research & Experimentation Tax Credit for Certain Small Businesses

On April 3, 2014, The Senate Finance Committee agreed to expand the Federal-Level Research and Experimentation Tax Credit (hereinafter “RTC”) for certain small businesses, making the tax incentive available to companies that don’t have an income tax liability.

The change, pushed by Senator Chuck Schumer (D-N.Y.) and other lawmakers on the Hill, proposes to make the RTC available to many start-up companies that typically aren’t able to claim it during their first years in operation, as Senator Chuck Schumer indicated at the Finance Committee’s markup on expired tax incentives. Senators across both sides of aisles approved the proposal on a voice vote, with no objections.

Pursuant to the currently expired statute, companies can take the RTC only if they have Read More

Written by | Posted in R&D Credit Services • Small Business

Tax Research Methodology

A Practical Guide to Perfecting Your Tax Research Techniques and Achieving Sustainable Tax Return Filing Positions

Introduction

In order to maximize your accounting firm’s overall efficiency, effectiveness, and productivity in connection to researching and resolving a tax issue and determining the sustainability of the tax return filing position, the appropriate tax research processes must be meticulously designed, implemented, and executed. The subsequent five comprehensive steps will guide you in establishing an all-inclusive tax research effort on behalf of your entire client base while properly ascertaining the likelihood of success Read More

Written by | Posted in R&D Credit Services

North Carolina Technology Development Credit Extended and Renamed as the Research and Development Credit.

TaxConnections Picture - NC Flag with US FlagGovernor Pat McCrory, North Carolina, signed House Bill 998 (aka Tax Simplification and Reduction Act) into law Tuesday, July 23, 2013. Among other outcomes, the state’s Research and Development Credit, formerly known as the Technology Development Credit, has been extended through 2015. Under the Research and Development Credit, North Carolina businesses with qualified research expenses are allowed a credit of up to 35% of the amount of those expenses. The exact rate depends on the circumstances of the taxpayer, the location of the research activity, and the amount of the expenses. This credit is the only remaining research credit offered by the state, as two of the original three credits previously offered by the state were repealed in 2006, when the state’s tax incentives were revamped. The credit cannot exceed 50% of the amount of tax against which it is claimed, reduced by the sum of all other tax credits allowed against that tax. Any unused portion may be carried forward for the succeeding fifteen taxable years.

TECHNICAL INFORMATION CONTACTS:

Allea Newbold, Principal – Ryan
Stephanie Shell-Condon, Director – Ryan

Written by | Posted in R&D Credit Services
  Recent Entries »