Florida Chamber of Commerce’s support of federal R&D Tax Credit reforms last year paid off recently when Congress authorized a package extending 2015 tax credits for U.S. businesses and households indefinitely, surpassing previous one-year extensions.
The Research & Experimentation Tax Credit, or R&D Tax Credit, is a general business tax credit under Internal Revenue Code section 41 for companies incurring research and development (R&D) costs in the U.S. Florida’s R&D Tax Credit depends on the federal R&D level, so when national standing changes it affects Florida’s status.
Tallahassee-based Florida Chamber of Commerce backed the extension by encouraging legislators to uphold the measure, which passed during a 2015 Legislative Special Session. Consequently, $23 million in tax credits is available, with an application period scheduled for March.
If applications exceed the available funding cap, credits will be pro-rated. In the future, Florida’s R&D credit will have a ceiling of $9 million, barring further congressional action. The Florida Chamber testified in November in front of the Florida House Finance & Tax Committee to advocate for an increase from $9 million to $23 million.
The advantage of rendering the federal R&D Tax Credit permanent is greater certainty for research and development enterprises, which would be able to adhere to one uniform set of standards instead of disparate state and federal requirements.