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US Tech Innovation Dreams Soured By Changed R&D Tax Laws
Brandon Vigliarolo reports via The Register: A US federal tax change that took effect in 2022 thanks to a time-triggered portion of the Trump-era Tax Cuts and Jobs Act may leave entrepreneurs with massive tax bills. Section 174 of the US tax code -- prior to the passage of the 2017 TCJA -- allowed ...
The TCJA included a post-dated change to Section 174 that took effect on January 1, 2022 that would no longer allow companies to automatically expense any SRE costs on an annual basis. This isn't theoretical -- Orosz said that he recently spoke to several engineers and entrepreneurs who've been surprised with massive tax bills that have led to layoffs, reduced hiring, and left some companies in financial distress. House of Representatives member Ron Estes (R-KS), who last year sponsored a bill to restore Section 174 to its pre-TCJA option to expense or amortize, likewise said an a late-2023 op-ed that the changes have led to R&D at US companies -- not just in the tech sector -- shrinking considerably.
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