Issue link: https://nebusinessmedia.uberflip.com/i/1498970
HARTFORDBUSINESS.COM | | MAY 15, 2023 37 OTHER VOICES Tax code must be changed to drive innovation in New England By James T. Brett H ere in New England, we are proud of our region's reputation as a global innovation hub. Our region is home to some of the world's most innovative companies, in industries ranging from defense, to life sciences, to clean energy, to technology. Each and every day, these businesses are making invest- ments in groundbreaking research and development aimed at saving lives, combating climate change, safeguarding our national security, and more. For many years, the U.S. tax code has encouraged such investments by allowing businesses to fully deduct qualified research and development (R&D) expenses each year. However, under a provision of the Tax Cuts and Jobs Act of 2017 that was signed into law by former Presi- dent Donald Trump, businesses must amortize or deduct these expenses over a period of five years. This provision went into effect for the 2022 tax year. This will ultimately make R&D more costly to conduct in New England and across the U.S. The New England Council believes firmly that the new R&D amortization requirement will halt and harm our region's continued growth and leader- ship on the global stage. As a result of this change, the U.S. is now only one of two developed countries requiring the amortization of R&D expenses. Comparatively, our nation's competitors, such as China, currently provide a "super deduction" for R&D expenses, which drastically increases the allowed amount deducted for companies that previously did not qualify. This change could result in compa- nies relocating R&D facilities and funding out of the country because it will be more costly to do research in the U.S. This will not only damage our competitiveness, but it could also have significant national security ramifications, as well as job losses. In fact, a recent study conducted by EY for the R&D Coalition found: "[F] ailing to reverse this change will cost well-paying jobs and reduce future innovation-directed R&D. Requiring the amortization of research expenses will reduce R&D spending and lead to a loss of more than 20,000 R&D jobs in the first five years with the number of lost jobs rising to nearly 60,000 over the following five years. Moreover, when accounting for the spillover effect from R&D spending, nearly three times as many jobs will be affected. This same study also found that for every $1 billion in R&D spending, 17,000 jobs are supported in the U.S." Fortunately, two members of Congress from the New England region are leading the bipartisan charge to reverse this harmful change in the tax code. In the U.S. Senate, Sen. Maggie Hassan (D-NH) has partnered with Sen. Todd Young (R-IN) to intro- duce the American Innovation and Jobs Act. In addition to allowing companies to fully deduct R&D expenses each year, Hassan's bill would also raise the cap over time for the refundable R&D tax credit for small businesses and startups, and expand eligibility for the refundable R&D tax credit so that more startups and new businesses can use it. In the U.S. House of Represen- tatives, Congressman John Larson (D-CT) has teamed with Rep. Ron Estes (R-KS) to introduce similar legislation, known as the American Innovation and R&D Competitive- ness Act. Similar to the Senate bill, Larson's proposal would allow companies to continue to fully deduct R&D expenses each year. The New England Council is proud to support both of these bills, and we urge others in the business commu- nity to also encourage Congress to pass this legislation. We have written to members of the New England Congressional delega- tion, calling on them to support these bills, and are hopeful that Congress will take action to pass them in the near future. James T. Brett is the president and CEO of The New England Council, a regional alliance of businesses, nonprofit organizations, and health and educational institutions dedicated to supporting economic growth and quality of life in New England. James T. Brett Home Sales Here's a list of recently sold luxury homes in Greater Hartford. Sale price Address Town Baths Beds Square footage Days on market $2,050,000 51 Soby Drive West Hartford 4 7 5,496 3 $1,200,000 7 Exeter Park Farmington 5 6 4,730 4 $1,050,000 28 Pembroke Hill Farmington 4 5 4,334 1 $920,000 4 Colony Road West Hartford 5 5 3,400 19 $880,000 46 Lord Davis Lane Avon 4 5 7,491 11 $840,576 72 Stallion Drive Glastonbury 4 4 2,880 637 $825,000 29 Holcomb Hill Road Granby 5 5 5,189 1 $825,000 124 Stoner Drive West Hartford 4 4 3,474 5 $787,892 6 Eastview Drive Canton 4 4 3,373 59 $775,000 12 Nottingham Boulevard Farmington 4 4 2,838 75 $775,000 36 Stratford Road West Hartford 4 4 2,531 3 $741,104 27 Winterset Lane Simsbury 4 3 4,158 4 $710,000 8 West Ridge Drive Rocky Hill 4 3 3,537 64 $700,000 65 Warren Glen Burlington 3 3 5,559 17 $690,713 74 Field Rock Road Bristol 4 3 2,300 3 $682,450 122 Nelson Drive Burlington 4 3 3,170 304 $680,000 130 Beacon Hill Drive West Hartford 4 3 3,294 1 $665,570 29 Willow Creek Lane Southington 4 3 2,530 2 $652,000 17 Brookline Drive West Hartford 4 3 2,566 5 $650,000 39 Stony Corners Avon 4 3 2,936 3 $635,000 393 Chimney Sweep Hill Road Glastonbury 4 3 3,212 2 Credit: Data provided by Evan L. Berman of William Raveis Broder Team. Contact him at evan@brodergroup.com.