Repeals the income and corporation franchise credit for research and development
Impact
The elimination of the research and development tax credit is expected to have a considerable impact on businesses that rely on such incentives to fund their innovative activities. Without this credit, companies may find it more challenging to justify investments in research initiatives, which could consequently inhibit economic growth and the development of new technologies within the state. The absence of this financial support could deter both new entrants into the market and existing companies looking to expand their R&D efforts, raising concerns about the long-term competitiveness of the state's economy.
Summary
House Bill 278 seeks to repeal the refundable income and corporation franchise tax credit aimed at promoting research and development activities within the state. Prior to the bill, this tax credit was designed to incentivize corporations to invest in R&D by providing them with financial relief based on the number of employees and tax claims authorized under federal law. The repeal of this tax credit, effective January 1, 2016, represents a significant shift in the state's tax policy regarding support for innovation and corporate investment in research.
Sentiment
The sentiment surrounding HB 278 appears to be mixed among various stakeholders. Proponents of the repeal may argue that the tax credit was a financial burden on the state budget and that resources could be better allocated to other areas. However, many business leaders and economic development advocates express concerns that such a repeal signals a lack of commitment to fostering a robust research ecosystem. This divide reflects broader ideological perspectives on the role of government in supporting economic innovation and the importance of public incentives in driving private sector growth.
Contention
Notable points of contention include the implication of the repeal on the future of research and development in the state. Opponents contend that by stripping away these incentives, the state is hindering its ability to attract and retain businesses that prioritize innovation. There may also be discussions on the broader implications for job creation and economic vitality, particularly in industries heavily reliant on R&D expenditures. As a result, the broader legislative and public discourse surrounding HB 278 is likely to focus on balancing fiscal responsibility with the necessity of supporting economic drivers.
Repeals the corporation franchise tax and limits eligibility of certain credits to be claimed against corporation franchise tax (Item #3) (EN -$574,000,000 RV See Note)
Repeals the corporation franchise tax and removes eligibility of certain tax credits to be claimed against corporation franchise tax (OR -$324,000,000 GF RV See Note)
Repeals state taxes levied on the taxable income of individuals and corporations and repeals tax credits, exemptions, deductions, and exclusions (OR DECREASE GF RV See Note)