Baucus Urges Colleagues to Extend AMT Relief Sooner Rather Than Later

Recently, you may have read that some are advocating holding off on the traditional business extenders and AMT relief for middle-income families, leaving these high-priority items for another day. I frankly believe this is a risky strategy. For the 17 million American taxpayers, mainly middle and upper middle-income taxpayers who lost protection from the stealthy Alternative Minimum Tax (AMT), this simply makes no sense. For the thousands of companies and their U.S. high-tech research employees that lost the important research and development(R&D) tax credit on December 31st, this is completely counter-intuitive.

Earlier this week, a coalition representing 85 trade associations and more than 1,000 small, medium and large companies wrote to me in favor of the Senate's two-year extension of the R&D credit. Their letter, signed by the coalition's co-chairs representing Microsoft, United Technologies, Boeing, Computer Associates, and the National Association of Manufacturers, stated:

For these companies performing U.S.-based research, and the millions of working families bearing the brunt of AMT, pushing extension of their provisions outside of the procedurally protected reconciliation bill should be a matter of great concern. I urge my colleagues to join me in resisting any attempt to defer or delay the extension of tax provisions that have already expired.

On behalf of the members of the R&D Credit Coalition,we thank you for your leadership in amending the Tax Relief Act of 2005 to include a two-year extension of a strengthened research tax credit (the "R&D" tax credit). It is critical that the credit be extended and strengthened and the additional length of the proposed extension will provide needed certainty to businesses that are making investment and hiring decisions.

The Coalition believes the Senate-passed provision will help make the credit a more powerful incentive to undertake long-term, high-risk R&D projects in the United States. Consistent with the position you and 45 of your Senate colleagues have taken as sponsors of a permanent and strengthened R&D credit, extending this credit for an additional year will better enable the intended incentive effect of the tax credit to be realized. The best incentive is one on which businesses can rely and one that applies broadly to all research-intensive companies. The members of the R&D Credit Coalition applaud your efforts to strengthen this credit and to lengthen its extension period. We look forward to working with you on this issue.