Efforts Continue to Repeal Onerous R&D Amortization Rules

March 27, 2024

Driving Innovation Through R&D Tax Policy Reform

The Tax Relief for American Families and Workers Act of 2024 or HB 7204 was introduced that would, among other things, repeal current rules and allow a business to deduct of R&D costs in the tax year that they occur and thereby incentivize long-term investments in innovation.


Such repeal has been a top policy priority for MichBio and the bio-industry generally as it would aid many early-stage companies who have suffered greatly by not being able to immediate qualified tax relief for their businesses. HB 7204 had broad support from the Michigan Congressional delegation with Reps. Huizenga, Moolenaar, Kildee, Scholten, Slotkin, and Stevens, having signed as co-sponsors.


The legislation passed the House with strong bipartisan fashion (357-70) in an after-hours vote on January 31, 2024. It restores the ability to immediately deduct R&D expenses. In addition, the bill included the following provisions: reinstatement of bonus depreciation to 100% until 2026, made retroactive to 2022, meaning taxpayers will be able to deduct all R&D expenses that were previously amortized, restored ability to allow depreciation, amortization and depletion when determining the limitation on business interest expense deductions under Section 163(j), and extended the period in which the IRS can audit ERC claims to six years and terminates the ability to submit any ERC claim after January 31, 2024.


The Bill now resides with the Senate Finance Committee. However, ranking Minority Chair Crapo has major issues with the overall bill, mostly related to other, non-R&D amortization, elements. Both Michigan Sens. Stabenow and Peters are strong supporters of the bill. However, deep misgivings by Senate Republicans and an unwillingness to go against the Minority Committee Chair has stalled action on the bill.


MichBio is continuing to press Congressional leaders to move the measure forward this spring.

RECENT ARTICLES

MichBio Hiring: Intern, Association Membership & Resource Analytics

April 15, 2025
MichBio seeks a highly motivated individual who can work creatively in a small team environment and assist in data mining, compilation, and research.

Bio Survey Underscores Impacts of Tariffs for Businesses

April 11, 2025
The Biotechnology Innovation Organization (BIO), of which MichBio is a state affiliate recently released the results of a survey of its members, noting that “U.S. Biotechs Sound the Alarm” on tariff impacts. The findings include: Tariffs on European Union and Canadian imports would increase manufacturing costs for 94% and 82% of biotech firms, respectively. 70% of companies anticipate higher manufacturing costs due to tariffs on China. Tariffs on the European Union would force 50% of biotech firms to identify new research and manufacturing partners. More than 50% of biotech firms predict “increased difficulty” in funding and conducting research if EU tariffs are enacted. 80% of biotech firms would need at least 12 months to find alternative suppliers; 44% would need over two years. The survey noted that sudden tariffs would fundamentally punish American companies, threaten vital research projects and imperil United States leadership in biomedical science. Read BIO’s press release , along with an one-pager summarizing the survey results. 

Amid Proposed Cuts, Commission Calls For $15B NIH Support

April 10, 2025
A federal commission, in a new report , is calling for $15 billion in new financing to reinforce the United States’ biotech leadership amid encroaching competition from China. This comes against a backdrop where the Trump Administration has proposed severe cuts to NIH operations and funding. The National Security Commission on Emerging Biotechnology was created by Congress in 2022 to explore how biotechnology advancements could shape the economy and national security. The body quickly focused on China, as that government has gone about gathering Americans’ genetic information and intellectual property in the biotech space and resourcing their cluster’s rapid growth. The report’s 49 recommendations, organized across six strategic pillars, offer a bold and actionable framework to protect U.S. biotech intellectual property and bolster drug development, agriculture, and biological weapons defense: Prioritize biotechnology at the national level Mobilize the private sector to get U.S. products to scale Maximize the benefits of biotechnology for defense Out-innovate our strategic competitors Build the biotechnology workforce of the future Mobilize the collective strengths of our allies and partners The report calls for $1 billion to create an investment fund, more than $6 billion for large-scale research challenges, and a build-up of biomanufacturing sites across the country. Also, it calls for new legislation barring companies that work with U.S. national security agencies or health agencies from using certain Chinese biotech suppliers. The commission doesn’t have the power to authorize any changes but can make recommendations and advise members of Congress. BIO issued a statement in support.