Us Congress 2025-2026 Regular Session

Us Congress House Bill HB1990 Compare Versions

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Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 1990
5	5	To amend the Internal Revenue Code of 1986 to restore the deduction
6	6	for research and experimental expenditures.
7	7	IN THE HOUSE OF REPRESENTATIVES
8	8	MARCH10, 2025
9	9	Mr. E
10	10	STES(for himself, Mr. LARSONof Connecticut, Mr. BUCHANAN, Ms.
11	11	D
12	12	ELBENE, Mr. SMITHof Nebraska, Ms. SEWELL, Mr. KELLYof Penn-
13	13	sylvania, Mr. B
14	14	EYER, Mr. SCHWEIKERT, Mr. PANETTA, Mr. LAHOOD,
15	15	Mr. H
16	16	ORSFORD, Mr. ARRINGTON, Ms. BROWNLEY, Mr. SMUCKER, Mr.
17	17	K
18	18	HANNA, Mr. HERNof Oklahoma, Ms. BONAMICI, Mrs. MILLERof West
19	19	Virginia, Ms. T
20	20	ITUS, Mr. MURPHY, Ms. HOULAHAN, Mr. KUSTOFF, Mr.
21	21	C
22	22	LEAVER, Mr. FITZPATRICK, Mr. CARBAJAL, Mr. STEUBE, Mrs.
23	23	F
24	24	OUSHEE, Ms. TENNEY, Ms. SCHOLTEN, Mrs. FISCHBACH, Ms. DAVIDS
25	25	of Kansas, Mr. M
26	26	OOREof Utah, Ms. CRAIG, Ms. VANDUYNE, Mr.
27	27	M
28	28	ORELLE, Mr. FEENSTRA, Mr. DAVISof North Carolina, Ms.
29	29	M
30	30	ALLIOTAKIS, Mr. HARDERof California, Mr. CAREY, Mr. NEGUSE, Mr.
31	31	Y
32	32	AKYM, Mr. AUCHINCLOSS, Mr. MILLERof Ohio, Mr. PAPPAS, Mr. BEAN
33	33	of Florida, Mr. M
34	34	OULTON, Mr. MORAN, Mr. MULLIN, Mr. MOOLENAAR,
35	35	Mr. C
36	36	ONNOLLY, Mrs. HARSHBARGER, Ms. MCCLELLAN, Mr. HUIZENGA,
37	37	Mr. K
38	38	RISHNAMOORTHI, Mr. MANN, Mr. LIEU, Mr. BARR, Ms. JACOBS,
39	39	Mr. C
40	40	ARTERof Georgia, Mr. SWALWELL, Mr. MEUSER, Mr. GARAMENDI,
41	41	Mr. M
42	42	CCORMICK, Mr. AMO, Mr. EDWARDS, and Mrs. BEATTY) intro-
43	43	duced the following bill; which was referred to the Committee on Ways
44	44	and Means
45	45	A BILL
46	46	To amend the Internal Revenue Code of 1986 to restore
47	47	the deduction for research and experimental expenditures.
48	48	Be it enacted by the Senate and House of Representa-1
49	49	tives of the United States of America in Congress assembled, 2
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52	52	•HR 1990 IH
53	53	SECTION 1. SHORT TITLE. 1
54	54	This Act may be cited as the ‘‘American Innovation 2
55	55	and R&D Competitiveness Act of 2025’’. 3
56	56	SEC. 2. RESEARCH AND EXPERIMENTAL EXPENDITURES. 4
57	57	(a) I
58	58	NGENERAL.—Section 174 of the Internal Rev-5
59	59	enue Code of 1986 is amended to read as follows: 6
60	60	‘‘SEC. 174. RESEARCH AND EXPERIMENTAL EXPENDITURES. 7
61	61	‘‘(a) T
62	62	REATMENT ASEXPENSES.— 8
63	63	‘‘(1) I
64	64	N GENERAL.—A taxpayer may treat re-9
65	65	search or experimental expenditures which are paid 10
66	66	or incurred by him during the taxable year in con-11
67	67	nection with his trade or business as expenses which 12
68	68	are not chargeable to capital account. The expendi-13
69	69	tures so treated shall be allowed as a deduction. 14
70	70	‘‘(2) W
71	71	HEN METHOD MAY BE ADOPTED .— 15
72	72	‘‘(A) W
73	73	ITHOUT CONSENT .—A taxpayer 16
74	74	may, without the consent of the Secretary, 17
75	75	adopt the method provided in this subsection 18
76	76	for his first taxable year for which expenditures 19
77	77	described in paragraph (1) are paid or incurred. 20
78	78	‘‘(B) W
79	79	ITH CONSENT.—A taxpayer may, 21
80	80	with the consent of the Secretary, adopt at any 22
81	81	time the method provided in this subsection. 23
82	82	‘‘(3) S
83	83	COPE.—The method adopted under this 24
84	84	subsection shall apply to all expenditures described 25
85	85	in paragraph (1). The method adopted shall be ad-26
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88	88	•HR 1990 IH
89	89	hered to in computing taxable income for the taxable 1
90	90	year and for all subsequent taxable years unless, 2
91	91	with the approval of the Secretary, a change to a 3
92	92	different method is authorized with respect to part 4
93	93	or all of such expenditures. 5
94	94	‘‘(b) A
95	95	MORTIZATION OF CERTAINRESEARCH AND 6
96	96	E
97	97	XPERIMENTALEXPENDITURES.— 7
98	98	‘‘(1) I
99	99	N GENERAL.—At the election of the tax-8
100	100	payer, made in accordance with regulations pre-9
101	101	scribed by the Secretary, research or experimental 10
102	102	expenditures which are— 11
103	103	‘‘(A) paid or incurred by the taxpayer in 12
104	104	connection with his trade or business, 13
105	105	‘‘(B) not treated as expenses under sub-14
106	106	section (a), and 15
107	107	‘‘(C) chargeable to capital account but not 16
108	108	chargeable to property of a character which is 17
109	109	subject to the allowance under section 167 (re-18
110	110	lating to allowance for depreciation, etc.) or sec-19
111	111	tion 611 (relating to allowance for depletion), 20
112	112	may be treated as deferred expenses. In computing 21
113	113	taxable income, such deferred expenses shall be al-22
114	114	lowed as a deduction ratably over such period of not 23
115	115	less than 60 months as may be selected by the tax-24
116	116	payer (beginning with the month in which the tax-25
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119	119	•HR 1990 IH
120	120	payer first realizes benefits from such expenditures). 1
121	121	Such deferred expenses are expenditures properly 2
122	122	chargeable to capital account for purposes of section 3
123	123	1016(a)(1) (relating to adjustments to basis of prop-4
124	124	erty). 5
125	125	‘‘(2) T
126	126	IME FOR AND SCOPE OF ELECTION .—The 6
127	127	election provided by paragraph (1) may be made for 7
128	128	any taxable year, but only if made not later than the 8
129	129	time prescribed by law for filing the return for such 9
130	130	taxable year (including extensions thereof). The 10
131	131	method so elected, and the period selected by the 11
132	132	taxpayer, shall be adhered to in computing taxable 12
133	133	income for the taxable year for which the election is 13
134	134	made and for all subsequent taxable years unless, 14
135	135	with the approval of the Secretary, a change to a 15
136	136	different method (or to a different period) is author-16
137	137	ized with respect to part or all of such expenditures. 17
138	138	The election shall not apply to any expenditure paid 18
139	139	or incurred during any taxable year before the tax-19
140	140	able year for which the taxpayer makes the election. 20
141	141	‘‘(c) L
142	142	AND ANDOTHERPROPERTY.—This section 21
143	143	shall not apply to any expenditure for the acquisition or 22
144	144	improvement of land, or for the acquisition or improve-23
145	145	ment of property to be used in connection with the re-24
146	146	search or experimentation and of a character which is sub-25
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149	149	•HR 1990 IH
150	150	ject to the allowance under section 167 (relating to allow-1
151	151	ance for depreciation, etc.) or section 611 (relating to al-2
152	152	lowance for depletion); but for purposes of this section al-3
153	153	lowances under section 167, and allowances under section 4
154	154	611, shall be considered as expenditures. 5
155	155	‘‘(d) E
156	156	XPLORATIONEXPENDITURES.—This section 6
157	157	shall not apply to any expenditure paid or incurred for 7
158	158	the purpose of ascertaining the existence, location, extent, 8
159	159	or quality of any deposit of ore or other mineral (including 9
160	160	oil and gas). 10
161	161	‘‘(e) O
162	162	NLYREASONABLERESEARCHEXPENDITURES 11
163	163	E
164	164	LIGIBLE.—This section shall apply to a research or ex-12
165	165	perimental expenditure only to the extent that the amount 13
166	166	thereof is reasonable under the circumstances.’’. 14
167	167	(b) C
168	168	LERICALAMENDMENT.—The table of sections 15
169	169	for part VI of subchapter B of chapter 1 of such Code 16
170	170	is amended by striking the item relating to section 174 17
171	171	and inserting the following new item: 18
172	172	‘‘Sec. 174. Research and experimental expenditures’’.
173	173	(c) CONFORMINGAMENDMENTS.— 19
174	174	(1) Section 41(d)(1)(A) of such Code is amend-20
175	175	ed by striking ‘‘specified research or experimental 21
176	176	expenditures under section 174’’ and inserting ‘‘ex-22
177	177	penses under section 174’’. 23
178	178	(2) Section 280C(c) of such Code is amended to 24
179	179	read as follows: 25
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182	182	•HR 1990 IH
183	183	‘‘(c) CREDIT FORINCREASINGRESEARCHACTIVI-1
184	184	TIES.— 2
185	185	‘‘(1) I
186	186	N GENERAL.—No deduction shall be al-3
187	187	lowed for that portion of the qualified research ex-4
188	188	penses (as defined in section 41(b)) or basic re-5
189	189	search expenses (as defined in section 41(e)(2)) oth-6
190	190	erwise allowable as a deduction for the taxable year 7
191	191	which is equal to the amount of the credit deter-8
192	192	mined for such taxable year under section 41(a). 9
193	193	‘‘(2) S
194	194	IMILAR RULE WHERE TAXPAYER CAP -10
195	195	ITALIZES RATHER THAN DEDUCTS EXPENSES .—If— 11
196	196	‘‘(A) the amount of the credit determined 12
197	197	for the taxable year under section 41(a)(1), ex-13
198	198	ceeds 14
199	199	‘‘(B) the amount allowable as a deduction 15
200	200	for such taxable year for qualified research ex-16
201	201	penses or basic research expenses (determined 17
202	202	without regard to paragraph (1)), 18
203	203	the amount chargeable to capital account for the 19
204	204	taxable year for such expenses shall be reduced by 20
205	205	the amount of such excess. 21
206	206	‘‘(3) E
207	207	LECTION OF REDUCED CREDIT .— 22
208	208	‘‘(A) I
209	209	N GENERAL.—In the case of any 23
210	210	taxable year for which an election is made 24
211	211	under this paragraph— 25
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214	214	•HR 1990 IH
215	215	‘‘(i) paragraphs (1) and (2) shall not 1
216	216	apply, and 2
217	217	‘‘(ii) the amount of the credit under 3
218	218	section 41(a) shall be the amount deter-4
219	219	mined under subparagraph (B). 5
220	220	‘‘(B) A
221	221	MOUNT OF REDUCED CREDIT .—The 6
222	222	amount of credit determined under this sub-7
223	223	paragraph for any taxable year shall be the 8
224	224	amount equal to the excess of— 9
225	225	‘‘(i) the amount of credit determined 10
226	226	under section 41(a) without regard to this 11
227	227	paragraph, over 12
228	228	‘‘(ii) the product of— 13
229	229	‘‘(I) the amount described in 14
230	230	clause (i), and 15
231	231	‘‘(II) the rate of tax under sec-16
232	232	tion 11(b). 17
233	233	‘‘(C) E
234	234	LECTION.—An election under this 18
235	235	paragraph for any taxable year shall be made 19
236	236	not later than the time for filing the return of 20
237	237	tax for such year (including extensions), shall 21
238	238	be made on such return, and shall be made in 22
239	239	such manner as the Secretary may prescribe. 23
240	240	Such an election, once made, shall be irrev-24
241	241	ocable. 25
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244	244	•HR 1990 IH
245	245	‘‘(4) CONTROLLED GROUPS .—Paragraph (3) of 1
246	246	subsection (b) shall apply for purposes of this sub-2
247	247	section.’’. 3
248	248	(d) E
249	249	FFECTIVEDATE.—The amendments made by 4
250	250	this section shall apply to taxable years beginning after 5
251	251	December 31, 2021. 6
252	252	Æ
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