Start-up companies would have access to research and development tax credits currently available only to companies with established revenue streams if legislation co-sponsored by U.S. Sen. Charles Schumer becomes law.
The legislation would benefit Rochester-area entities such as High Tech Rochester Inc. and Excell Partners Inc., Schumer said in a statement Wednesday.
“As the R&D tax credit program exists now, start-up companies are starting behind the eight ball, without access to the same job-producing programs that already established and profitable companies enjoy,” Schumer said in the statement.
The Senate bill was introduced Tuesday by Delaware Democrat Christopher Coons and Wyoming Republican Michael Enzi. Similar legislation is expected to be introduced this week in the House of Representatives.
The Startup Innovation Credit Act of 2012 would allow emerging companies to claim the tax credits against employment taxes rather than income taxes, Schumer said.
Companies less than five years old and with gross receipts of less than $5 million would qualify.
“Innovative programs like the R&D tax credit can make a huge difference in helping those companies preserve their much-needed cash so they can invest in their businesses and improve their odds of getting across that commercialization chasm,” High Tech Rochester President James Senall said in the statement.
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