While all eyes are on Congress to see whether they will resolve the credit crunch by bailing out banks and other financial institutions from their own greed, another money bill, the Research and Development Tax Credit moved one step closer to passage on Friday. However, the deal is not yet closed.
In the latest news, the House of Representatives and Senate both passed a two-year extension to the Tax Credit that is fully offset, meaning it will be retroactive for 2008 and expire in December 2009. That is the good news.
The bad news is the same extension was added to two separate bills, one in the Senate and one in the House, and as we went to press, neither body was compromising on how to budget for the credit.
According to a spokesperson for the R&D Credit Association, Representative Steny Hoyer (D-Md.), House leader, said the House will not accept the Senate bill.
Part of the problem is that each version of the tax credit extension appears in a separate bill, one from the Senate and one from the House, meaning a conference committee cannot be used to resolve the differences.
As reported by InfoWorld last week, the tax credit, which in high tech goes mainly to paying salaries for workers doing R&D, lapsed last December.
The Information Technology Association of America, a lobbying group for the high-tech industry, estimates that more than 106,000 jobs would have either been lost or not created and almost $14 billion in potential revenue lost due to the Congressional failure to reinstate the credit for 2008.
The question is will the 110th Congress adjourn before the differences are worked out.