U.S. Senator Katie Britt, Colleagues Introduce Legislation to Prioritize American Innovation and Jobs

WASHINGTON, D.C. – U.S. Senator Katie Britt (R-Ala.) joined Senators Todd Young (R-Ind.), Maggie Hassan (D-N.H.), and several of their colleagues in introducing the bipartisan American Innovation and Jobs Act.

“My support of the American Innovation and Jobs Act emphasizes my continued commitment to putting hardworking Americans first. I’m grateful to join my colleagues in introducing this legislation to help small businesses invest in research and development with fewer barriers. It is absolutely imperative we remain global leaders in innovation, not only to outcompete the likes of China, but also to protect our national interests and support great American entrepreneurs,” said Senator Britt.  

This legislation would expand and strengthen research and development (R&D) by small businesses and startups in the United States. The bill would help America outcompete and out-innovate global rivals, like China, who are significantly investing in R&D.  

“The United States is locked in a competition to ensure we maintain our position as the global leader in scientific and technological innovation. Our legislation would incentivize job-creating R&D activity in the United States – particularly among start-ups – to drive our innovation future, strengthen international competitiveness, and protect our national security. Congress must pass this legislation,” said Senator Young.

Companies and startups investing in R&D have long been able to either claim a tax credit or deduct their investments, which helps them to invest in developing new, innovative products that lead to additional jobs and a stronger economy. In 2017, Congress passed the Tax Cuts and Jobs Act, which included a provision allowing full and immediate expensing of R&D investments. This provision began phasing out in 2022 and is set to expire beginning in 2026.

“As many small businesses struggle with rising costs, this bipartisan legislation cuts taxes for small businesses that invest in innovation, which will also help the United States continue to outcompete our adversaries like China,” said Senator Hassan.

With the ultimate goal of investing in cutting-edge American technologies, the bill would make permanent this expiring provision, allowing companies to continue to fully deduct R&D expenses each year, while allowing businesses to retroactively take advantage of the deduction for the tax years during which full expensing had begun to amortize.

Additionally, it would expand support for innovative startups by ultimately raising the cap on refundable R&D tax credit to $750,000 over ten years and lowering certain thresholds needed to qualify for startups. Finally, the act would expand the number of startups eligible to use the refundable R&D credit by increasing the eligibility threshold from $5 million to $15 million in gross receipts and increasing the period during which startups can claim the credit to up to eight years after hitting $25,000 in revenue.

Senator Britt also co-sponsored the American Innovation and Jobs Act in 2023. Full text of the legislation can be found here.

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