The App Association has expressed support for the U.S. House Ways and Means Committee's decision to restore immediate tax deductibility of research and development (R&D) investments for five years. Morgan Reed, President of ACT | The App Association, stated, "We commend Chairman Smith and the U.S House Ways and Means Committee for taking action to restore immediate expensing of R&D investments for five years." Reed described this move as a positive initial step toward supporting small business innovation, job creation, and economic growth.
Reed also emphasized the need for further improvements in the legislation as it progresses through reconciliation. "As the reconciliation process continues, we look forward to working with our allies in the House and Senate to further improve the provisions in the final bill," he said.
The association outlined additional needs for small businesses concerning R&D expenses. They advocate making full expensing permanent to provide predictability and security necessary for long-term investment strategies. Furthermore, they call for retroactive application of full expensing back to 2022. Since current rules took effect that year, many small businesses have faced increased tax burdens leading them to alter development plans or seek external funding under unfavorable terms.
Lastly, The App Association urges inclusion of immediate foreign expensing. They argue that excluding this puts U.S. companies at a disadvantage compared to international competitors since American small technology businesses are key players in global innovation.