WASHINGTON, D.C. – At press time, a measure extending a research-and-development tax credit had been approved by both houses of Congress and was awaiting President Bill Clinton’s signature.
The president intends to sign the bill, which extends the write-off until mid-2004, a White House spokeswoman said.
The perk is not directly helpful to venture capitalists or their young portfolio companies that operate in the red, but supporters say the measure benefits larger high-tech companies, which in turn help younger, smaller companies (VCJ, May 1999, page 6).
Unrelated to the In Process Research & Development (IRP&D) deductions under recent scrutiny by the Securities and Exchange Commission and the Financial Accounting Standards Board (VCJ, October 1999, page 5), the R&D credit was created in 1981. It had been extended nine times since then and supporters this year sought to make it permanent so companies could count on it and make long-term research plans with the credit in mind.
Congress stopped short of permanence but gave the measure a longer extension than usual – five years, backdated to last summer.