,,ii #aaith ,,congress #ast ,session ,s4 #afci ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #g1 #bjbe ,mr4 ,young 7for himself1 ,ms4 ,hassan1 ,mr4 ,lankford1 ,mrs4 ,shaheen1 ,mr4 ,daines1 ,mr4 ,warner1 ,mr4 ,barrasso1 ,ms4 ,rosen1 ,mr4 ,tillis1 ,mr4 ,peters1 ,mr4 ,marshall1 ,mr4 ,padilla1 ,mr4 ,tuberville1 ,mrs4 ,murray1 ,mr4 ,kennedy1 ,ms4 ,klobuchar1 ,mr4 ,ricketts1 ,mr4 ,kelly1 ,mrs4 ,britt1 ,mr4 ,kaine1 ,mrs4 ,capito1 ,ms4 ,cortez ,masto1 ,mrs4 ,fischer1 ,ms4 ,baldwin1 ,mr4 ,moran1 ,mr4 ,lujn1 ,mr4 ,hagerty1 ,mr4 ,coons1 ,mr4 ,mullin1 ,ms4 ,slotkin1 ,mr4 ,wicker1 ,mr4 ,king1 ,mr4 ,budd1 ,mr4 ,ossoff1 ,mr4 ,husted1 and ,mr4 ,heinrich7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to enhance tax benefits for research activities4 #a4 ,short title ,this ,act may be cited as the ,american ,innovation and ,jobs ,act4 #b4 ,restoring immediate expensing for research and development investments 7a7 ,in general ,section #agd of the ,internal ,revenue ,code of #aihf is amended to read as follows3 #agd4 ,research and experimental expenditures 7a7 ,treatment as ,expenses 7#a7 ,in general ,a taxpayer may treat research or experimental expenditures which are paid or incurred by him during the taxable year in connection with his trade or business as expenses which are not chargeable to capital account4 ,the expenditures so treated shall be allowed as a deduction4 7#b7 ,when method may be adopted 7,a7 ,without consent ,a taxpayer may1 without the consent of the ,secretary1 adopt the method provided in this subsection for his first taxable year for which expenditures described in paragraph 7#a7 are paid or incurred4 7,b7 ,with consent ,a taxpayer may1 with the consent of the ,secretary1 adopt at any time the method provided in this subsection4 7#c7 ,scope ,the method adopted under this subsection shall apply to all expenditures described in paragraph 7#a74 ,the method adopted shall be adhered to in computing taxable income for the taxable year and for all subsequent taxable years unless1 with the approval of the ,secretary1 a change to a different method is authorized with respect to part or all of such expenditures4 7b7 ,amortization of ,certain ,research and ,experimental ,expenditures 7#a7 ,in general ,at the election of the taxpayer1 made in accordance with regulations prescribed by the ,secretary1 research or experimental expenditures which are-- 7,a7 paid or incurred by the taxpayer in connection with his trade or business1 7,b7 not treated as expenses under subsection 7a71 and 7,c7 chargeable to capital account but not chargeable to property of a character which is subject to the allowance under section #afg 7relating to allowance for depreciation1 etc47 or section #faa 7relating to allowance for depletion71 may be treated as deferred expenses4 ,in computing taxable income1 such deferred expenses shall be allowed as a deduction ratably over such period of not less than #fj months as may be selected by the taxpayer 7beginning with the month in which the taxpayer first realizes benefits from such expenditures74 ,such deferred expenses are expenditures properly chargeable to capital account for purposes of section #ajaf7;a77#a7 7relating to adjustments to basis of property74 7#b7 ,time for and scope of election ,the election provided by paragraph 7#a7 may be made for any taxable year1 but only if made not later than the time prescribed by law for filing the return for such taxable year 7including extensions thereof74 ,the method so elected1 and the period selected by the taxpayer1 shall be adhered to in computing taxable income for the taxable year for which the election is made and for all subsequent taxable years unless1 with the approval of the ,secretary1 a change to a different method 7or to a different period7 is authorized with respect to part or all of such expenditures4 ,the election shall not apply to any expenditure paid or incurred during any taxable year before the taxable year for which the taxpayer makes the election4 7c7 ,land and ,other ,property ,this section shall not apply to any expenditure for the acquisition or improvement of land1 or for the acquisition or improvement of property to be used in connection with the research or experimentation and of a character which is subject to the allowance under section #afg 7relating to allowance for depreciation1 etc47 or section #faa 7relating to allowance for depletion72 but for purposes of this section allowances under section #afg1 and allowances under section #faa1 shall be considered as expenditures4 7d7 ,exploration ,expenditures ,this section shall not apply to any expenditure paid or incurred for the purpose of ascertaining the existence1 location1 extent1 or quality of any deposit of ore or other mineral 7including oil and gas74 7e7 ,only ,reasonable ,research ,expenditures ,eligible ,this section shall apply to a research or experimental expenditure only to the extent that the amount thereof is reasonable under the circumstances4 7f7 ,cross ,references 7#a7 ,for adjustments to basis of property for amounts allowed as deductions as deferred expenses under subsection 7b71 see section #ajaf7;a77#ad74 7#b7 ,for election of #aj-year amortization of expenditures allowable as a deduction under subsection 7a71 see section #ei7;e74 4 7b7 ,clerical ,amendment ,the table of sections for part ,,vi of subchapter ,b of chapter #a is amended by striking the item relating to section #agd and inserting the following new item3 ,sec4 #agd4 ,research and experimental expenditures 4 7c7 ,conforming ,amendments 7#a7 ,section #da7;d77#a77;,a7 is amended by striking specified research or experimental expenditures under section #agd and inserting expenses under section #agd4 7#b7 ,section #bhj;,c7c7 is amended to read as follows3 7c7 ,credit for ,increasing ,research ,activities 7#a7 ,in general ,no deduction shall be allowed for that portion of the qualified research expenses 7as defined in section #da7;b77 or basic research expenses 7as defined in section #da7;e77#b77 otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for such taxable year under section #da7;a74 7#b7 ,similar rule where taxpayer capitalizes rather than deducts expenses ,if-- 7,a7 the amount of the credit determined for the taxable year under section #da7;a77#a71 exceeds 7,b7 the amount allowable as a deduction for such taxable year for qualified research expenses or basic research expenses 7determined without regard to paragraph 7#a771 the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess4 7#c7 ,election of reduced credit 7,a7 ,in general ,in the case of any taxable year for which an election is made under this paragraph-- 7i7 paragraphs 7#a7 and 7#b7 shall not apply1 and 7ii7 the amount of the credit under section #da7;a7 shall be the amount determined under subparagraph 7,b74 7,b7 ,amount of reduced credit ,the amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of-- 7i7 the amount of credit determined under section #da7;a7 without regard to this paragraph1 over 7ii7 the product of-- 7,i7 the amount described in clause 7i71 and 7,,ii7 the rate of tax under section #aa7;b74 7,c7 ,election ,an election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year 7including extensions71 shall be made on such return1 and shall be made in such manner as the ,secretary may prescribe4 ,such an election1 once made1 shall be irrevocable4 7#d7 ,controlled groups ,paragraph 7#c7 of subsection 7b7 shall apply for purposes of this subsection4 4 7d7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjba4 #c4 ,expanding refundable research credit for new and small businesses 7a7 ,increasing cap on refundable credit 7#a7 ,in general ,subclause 7,i7 of section #da7;h77#d77;,b77i7 of the ,internal ,revenue ,code of #aihf is amended by striking #bej1jjj and inserting the applicable amount4 7#b7 ,applicable amount ,subclause 7,,ii7 of section #da7;h77#d77;,b77i7 of such ,code is amended to read as follows3 7,,ii7 ,applicable amount ,for purposes of subclause 7,i71 the applicable amount is-- 7aa7 in the case of any taxable year beginning after ,december #ca1 #bjbd1 and before ,january #a1 #bjbf1 #ejj1jjj1 7bb7 in the case of any taxable year beginning after ,december #ca1 #bjbe1 and before ,january #a1 #bjbg1 #ebe1jjj1 7cc7 in the case of any taxable year beginning after ,december #ca1 #bjbf1 and before ,january #a1 #bjbh1 #eej1jjj1 7dd7 in the case of any taxable year beginning after ,december #ca1 #bjbg1 and before ,january #a1 #bjbi1 #ege1jjj1 7ee7 in the case of any taxable year beginning after ,december #ca1 #bjbh1 and before ,january #a1 #bjcj1 #fjj1jjj1 7ff7 in the case of any taxable year beginning after ,december #ca1 #bjbi1 and before ,january #a1 #bjca1 #fbe1jjj1 7gg7 in the case of any taxable year beginning after ,december #ca1 #bjcj1 and before ,january #a1 #bjcb1 #fej1jjj1 7hh7 in the case of any taxable year beginning after ,december #ca1 #bjca1 and before ,january #a1 #bjcc1 #fge1jjj1 7ii7 in the case of any taxable year beginning after ,december #ca1 #bjcb1 and before ,january #a1 #bjcd1 #gjj1jjj1 7jj7 in the case of any taxable year beginning after ,december #ca1 #bjcc1 and before ,january #a1 #bjce1 #gbe1jjj1 and 7kk7 in the case of any taxable year beginning after ,december #ca1 #bjcd1 #gej1jjj4 4 7#c7 ,conforming amendments 7,a7 ,clause 7ii7 of section #da7;h77#e77;,b7 of such ,code is amended by striking each of the #bej1jjj amounts and inserting the applicable amount4 7,b7 ,section #caaa7;f7 of such ,code is amended-- 7i7 in paragraph 7#a7-- 7,i7 by striking 7applied without regard to subclause 7,,ii7 thereof71 and and inserting a period1 7,,ii7 by striking subparagraph 7,b71 and 7,,iii7 by striking for a taxable year and all that follows through allowed as a credit and inserting for a taxable year1 there shall be allowed as a credit1 7ii7 in paragraph 7#b7-- 7,i7 by striking paragraph 7#a77;,a7 and inserting paragraph 7#a71 and 7,,ii7 by striking 1 and the credit allowed by paragraph 7#a77;,b7 shall not exceed the tax imposed by subsection 7b7 for any calendar quarter11 and 7iii7 in paragraph 7#d7-- 7,i7 by striking credits and inserting credit1 and 7,,ii7 by striking or 7b74 7b7 ,extension of eligibility and applicability of election 7#a7 ,startup date ,subclause 7,,ii7 of section #da7;h77#c77;,a77i7 of the ,internal ,revenue ,code of #aihf is amended by striking #e-taxable-year period and inserting #h-taxable-year period4 7#b7 ,extension of limitation on election ,clause 7ii7 of section #da7;h77#d77;,b7 of such ,code is amended by striking #e or more and inserting #h or more4 7c7 ,gross receipts test ,clause 7i7 of section #da7;h77#c77;,a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking #e1jjj1jjj in subclause 7,i7 and inserting #ae1jjj1jjj1 and 7#b7 by striking gross receipts in subclause 7,,ii7 and inserting gross receipts in excess of #be1jjj4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 #d4 ,increasing access to the research credit for startups 7a7 ,in general ,paragraph 7#d7 of section #da7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,d7 ,special rules for qualified small businesses ,in the case of a qualified small business 7as defined in subsection 7h77#c77-- 7i7 subparagraph 7,a7 shall be applied by substituting #bj percent for #ad percent1 and 7ii7 if subparagraph 7,b7 applies to such taxpayer1 at the election of the taxpayer-- 7,i7 subparagraph 7,b77ii7 shall be applied by substituting #aj percent for #f percent1 or 7,,ii7 in lieu of applying subparagraph 7,b71 the average under subparagraph 7,a7 shall be determined by disregarding any taxable year in the #c-year period described in such subparagraph in which there were no qualified research expenses4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4