FOR IMMEDIATE RELEASE
September 7, 2023
Contact:
Allie Judge, ajudge@cebn.org, Tel: 202-785-0507, ext. 1510
Washington, D.C. – Today, 210 cleantech business leaders, with support from the Clean Energy Business Network, sent a letter to all members of Congress urging them to pass bipartisan proposals restoring immediate expensing for the section 174 R&D tax deduction. Since 1954, section 174 has enabled businesses conducting research and development (R&D) to deduct these expenses in the year they are incurred. Unfortunately, this provision lapsed in 2022, and firms are now forced to amortize these expenses over five years, significantly increasing the cost of performing R&D and receiving federal grants.
The letter expressed support for bipartisan legislation addressing this issue — led by Senators Young (R-IN) and Hassan (D-NH) in the Senate (S. 866) and Representatives Estes (R-KS-04) and Larson (D-CT-01) in the House (H.R. 2673) — and called on Congress “to address this issue with the urgency our small business leaders deserve.”
“Small businesses are on the frontlines of developing the very cutting-edge technologies needed to ensure energy security, bring down energy costs, and reduce carbon emissions, yet the recent change to section 174 disproportionately impacts them,” said Lynn Abramson, CEBN President. “We’ve heard from innovative small businesses in our network that are having to stall projects, layoff staff, and face potential closure as a result of the significant tax burden posed by this lapse. Many now face a ticking clock as they have filed for extensions to mid-September and October this year.”
The letter also underscores how this change in the tax code runs counter to major public-private investments that the U.S. is making in cleantech innovation through recently enacted policy including the Inflation Reduction Act, CHIPS and Science Act, and Bipartisan Infrastructure Law. It states, “For a nation that prides itself on leading on innovation, the U.S. is lagging in the global economy on this front; with this lapsed provision in the tax code, the United States is now one of just two developed countries that requires amortization of R&D expenses.”
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The Clean Energy Business Network (CEBN) is the small business voice for the clean energy economy, working to enhance opportunities for clean energy providers through policy support, market and technology education, and business development assistance.
