Jorge Castro Comments on Request to Repeal Change to R&D Tax Rules in the Wall Street Journal
"U.S. CFOs Ask Congress to Repeal Change to R&D Tax Rules"
Wall Street Journal
Jorge Castro, former Counselor to the IRS Commissioner and former Congressional tax counsel, commented on a recent letter sent by 178 CFOs from large U.S. companies asking Congress to repeal a tax code change requiring businesses to spread their research and development (R&D) costs over five years rather than deduct them immediately. CFOs say this change will make it harder for the U.S. to be a global leader in innovation. Prior to this year, businesses were allowed to deduct certain R&D expenses right away in order to reduce their taxable income. Castro said the tax incentive is a key factor as companies assess how much can be deducted to offset R&D expenses, adding that rising interest rates and high inflation make the tax incentive more important. "When you spread out the deduction over five years, that is less powerful than incurring the deduction in the first year," Castro said.