Legislation Proposed to Lower Tax Rate on Profits Derived from Patented Products
- Aug 6 2013 |
- Category: Firm News
Rep. Allyson Schwartz, D-Pa., recently introduced H.R. 2605 (the Manufacturing Innovation in America Act) which calls for lowering the corporate tax rate from 35 percent to 10 percent on a company’s profits derived from the sale of qualifying patented products. This is Representative Schwartz’s most recent effort in her continuing fight for targeted tax cuts that promote innovative and emerging industries to create an environment for private sector job growth. A number of countries have already enacted tax incentives to spur the commercialization of R&D – – the UK having put in place such an incentive in April 2013. These incentives or “patent boxes” (so-called because there is a box to check off on the tax form) allow corporate income from the sale of qualifying patented products to be taxed at a lower rate than other income. H.R. 2605 would not only help spur innovation, but would help encourage such innovation to occur in the U.S. rather than losing R&D and manufacturing activities to another country offering such incentives. Presently, the bill has been sent to committee from which, unfortunately, many bills never emerge. If a “patent box” tax break sounds like a good idea to you, consider making a call to your representative requesting them to encourage the Ways and Means Committee to vote H.R. 2605 out of committee for consideration by the full House of Representatives.