Semiconductor Industry Representative Urges Proper Implementation of RandD Tax Credit

Wednesday, Apr 23, 2014, 3:00pm

by Semiconductor Industry Association

Ensuring the appropriate implementation of tax policies related to the research and development (R&D) credit is of critical importance to the U.S. semiconductor industry. Given our industry’s significant investments in R&D, SIA has long advocated for a strengthened and permanent R&D credit to promote innovation in the U.S.

Today, Bill Blaylock – Vice President & Senior Tax Counsel for Texas Instruments and co-chair of the SIA Tax Committee – testified at a hearing at the U.S. Department of the Treasury regarding proposed regulatory changes to the implementation of the R&D credit. The testimony, delivered on behalf of SIA and the Information Technology Industry Council, focused on a problematic proposed rule issued by the Treasury Department that would change the treatment of intra-group transactions in calculating the traditional R&D credit. In addition to violating the plain language of the statute, the proposed rule would introduce unnecessary ambiguity and lead to more taxpayer disputes. Blaylock argued that the proposed rule therefore should be withdrawn. These views were supported by other testimony at the hearing offered by major accounting firms.

Blaylock’s testimony echoed comments that SIA filed on March 12 calling for Treasury to withdraw the proposed rule as contrary to statute and congressional intent. SIA will continue to work to ensure that the R&D credit is properly implemented and reflects the semiconductor industry’s core tax priorities.