WASHINGTON – President Barack Obama’s proposal to make the R&D tax credit permanent would be a landmark accomplishment, SEMI said this week.

Obama proposed the move as part of his $3.8 trillion budget proposal for fiscal 2011.

The R&D tax credit, which was allowed to lapse on Dec. 31, provides an important financial incentive to locate R&D jobs in the US, and is used by many member companies, SEMI said.

However, the trade group is pessimistic of the chances, saying it is unlikely Congress will approve such a measure given the high cost. As an alternative, SEMI is urging Congress to pass a multiyear extension as soon as possible.

The budget proposal also includes an extension of the clean energy Manufacturing Tax Credit passed as part of the American Recovery and Reinvestment Act, also known as the stimulus bill. The budget would add $5 billion to the current cap of $2.3 billion, says SEMI.

SEMI lobbied for inclusion of the MTC in the stimulus bill, and met with many congressional offices to explain its importance.

SEMI says more needs to be done to promote demand for solar energy, as well as a domestic manufacturing base to provide needed infrastructure.  The trade group urges lawmakers to approve the administration’s proposed credit increase, and urges Congress to consider moving beyond this proposal, so there would no longer be a cap on the credits available.