Jeff Paravano Quoted About Impact of Laws Incentivizing Research and Development

News / April 5, 2023

The 2017 Tax Cuts and Jobs Act prevented companies from immediately and fully deducting research costs beginning with the 2022 tax year. But two major laws passed last year offer significant incentives for research and development (R&D), according to an April 5, 2023, Law360 Tax Authority article titled “R&D Expensing Loss May Be Outweighed by Other Incentives.”

The CHIPS Act and the Inflation Reduction Act, both passed in 2022, include subsidies and grants to boost semiconductor production and tax incentives for renewable energy, and Partner Jeff Paravano told Law360 their impact will be considerable. However, businesses operating at loss will not have access to tax incentives because they don’t pay tax. “If you’re not a taxpayer, the tax benefits of various expenses, including expenses related to R&D for wages and other things, may be less valuable,” he said.

Read the article (subscription required).

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