Securing relief for the Council’s member firms on research and development (R&D) amortization is a top priority for ACEC as Congress moves toward end-of-year legislation. Starting in 2022, engineering firms and other businesses must deduct R&D expenses over five years in most cases instead of the prior tax treatment of deducting these expenses in the year they were incurred. This change in the tax treatment of innovation expenses has caused severe cash flow problems for engineering firms.
Bipartisan legislation to fully repeal the R&D amortization requirement was introduced in the House and Senate in the spring. ACEC issued several action alerts through which member firms asked their members of Congress to cosponsor the American Innovation and R&D Competitiveness Act (H.R. 2673)/American Innovation and Jobs Act (S. 866). Nearly 11,000 emails were sent to Congress through these action alerts.
Repealing R&D amortization was also a key focus of the Council’s lobbying efforts during the 2023 ACEC Annual Convention and Legislative Summit.
Separate legislation that would delay the R&D amortization requirement until 2026 has passed the House Ways and Means Committee, although there has been no action in the Senate. It is expected that the House and Senate will negotiate a tax package before the end of the year that will include the R&D amortization delay and other business tax provisions, as well as an expanded child tax credit or other family tax relief.
The House approved the Securing Growth and Robust Leadership in American Aviation Act (H.R. 3935), bipartisan legislation to reauthorize the Federal Aviation Administration (FAA) and aviation safety and infrastructure programs for the next five years.
ACEC endorsed the bill, which increases federal investment in airport infrastructure and addresses other industry priorities.
“This bipartisan legislation will deliver aviation and airport infrastructure policies that enhance safety, facilitate economic development, and meet the growing needs of the traveling public,” wrote Council President and CEO Linda Bauer Darr to the bill’s sponsors, Transportation and Infrastructure Committee Chairman Sam Graves (R-Mo.) and Ranking Member Rick Larsen (D-Wash.).
The bill increases annual Airport Improvement Program (AIP) funding by $650 million over existing levels, to $4 billion per year for five years. It also expands program eligibility to include more terminal projects and includes environmental review permitting provisions.
The legislation also authorizes additional testing and evaluation of unmanned aircraft and mandates an FAA rulemaking on unmanned aircraft systems (UAS) operations beyond visual line of sight. “Engineering firms utilize UAS for a wide array of services, including surveying, construction site monitoring, facility inspections, and wetlands mapping,” Darr told lawmakers. “As these technologies continue to develop and their capabilities improve, it is essential that FAA continue to develop a comprehensive system for safely integrating UAS and advanced air mobility aircraft into the national airspace.”
The leaders of the Senate Commerce, Science, and Transportation Committee have introduced their version of FAA reauthorization, which also features an increase in AIP funding and provisions to advance UAS integration and operations beyond the visual line of sight. House and Senate leaders hope to negotiate a final bill later this year.