The Semiconductor Industry Association (SIA) has voiced its support for the Tax Relief for American Families and Workers Act (H.R. 7024), highlighting two provisions within the bill that it deems crucial to the semiconductor industry.
In a statement, SIA said, "The legislation restores domestic R&D expensing and seeks to resolve tax matters between the U.S. and Taiwan—two provisions essential to ensuring the competitiveness of the U.S. semiconductor industry and fully realizing the benefits of the CHIPS and Science Act." The association further noted that "The CHIPS Act was passed, in part, to help unlock investments in the semiconductor R&D ecosystem here in the U.S."
David Isaacs, Vice President of Government Affairs at SIA, emphasized on this point by stating, "The requirement of amortizing research expenditures undermines those efforts and runs counter to the longstanding immediate deduction of R&D costs that helps to sustain U.S. leadership in this vital technology."
According to details available on GovInfo.gov, H.R. 7024, sponsored by Rep. Jason Smith (R-Mo.), encompasses improvements to child tax credit, tax incentives for economic growth, special rules for taxation of certain residents of Taiwan with income from sources within the United States, tax relief associated with certain federal disasters and enhancements to low-income housing tax credit.
As per SIA's statement, two provisions stand out as being particularly important for the semiconductor industry: restoration of domestic R&D expensing and the United States-Taiwan Expedited Double-Tax Relief Act.
A press release issued by the House Ways and Means Committee indicates that this legislation received approval from the committee through a 40-3 bipartisan vote. It would secure $600 billion in tax policies from 2017 GOP tax reform, with provisions for research and development (R&D) incentives, 100 percent immediate expensing for equipment and machinery along with further flexible interest deductibility.
Another press release from the House Ways and Means Committee reveals that the United States-Taiwan Expedited Double Relief Tax Act, incorporated into the bill, aims to eliminate double taxation on cross-border investments between the United States and Taiwan. This is expected to increase foreign direct investment in both countries and reduce U.S. dependence on China for critical technologies and resources.
