SAN JOSE – The Semiconductor Industry Association today called for legislation to enhance and make permanent the R&D tax credit. The current law authorizing the credit is set to expire at the end of 2005 unless Congress passes legislation to extend it.

“Aggressive investment in research and development is critical to U.S. leadership in information technology, which in turn is the cornerstone of our national strategies for economic growth, productivity improvement, and national security,” said SIA president George Scalise in a press release. "We strongly urge Congress to pass legislation to ... make permanent the R&D tax credit. "

The House and Senate are considering H.R. 1736 and S. 627, respectively, which would pave the way to make the tax credit permanent. 

Scalise said that U.S. semiconductor companies spent approximately $17 billion (about 17% of revenue) on R&D in 2004. “The R&D tax credit is a very important incentive for sustaining investment in R&D activities.

Scalise called existing laws "a major drawback" because they are temporary and therefore create uncertainty. "Provisions contained in H.R. 1736 and S. 627 will strengthen the incentive value of the tax credit and make the U.S. more competitive with countries that are trying to attract these high-value activities.”