(May 1, 2009) A California Chamber of Commerce-supported bill that will help stimulate the economy is scheduled to be considered by an Assembly policy committee on May 4.
AB 765 (Caballero; D-Salinas), a “job creator” bill, encourages investment and jobs in research and development by increasing the research and development (R&D) tax credit rate from 15 percent to 20 percent, in conformity with federal law, beginning in 2011.
The bill will help in retaining and expanding the number of high-paying research-oriented jobs in California, and would help to grow a green economy by providing greater incentives for green technology companies to conduct their research in the state.
The R&D tax credit is, at its essence, a jobs credit. Industry-wide, 70 percent of the credit goes toward wages/salaries, Ernst & Young has estimated. With California unemployment currently at 10.5 percent, the R&D tax credit provides California companies with an additional tool in retaining employees in a down economy and provides greater incentive for reinvesting in California when it improves.
Augmenting credits for investments to promote the retention and hiring of new middle- to high-wage R&D jobs in California will serve to foster productivity gains, making businesses more competitive and allowing them to keep employees and grow the middle class in California.
Moreover, a more robust R&D tax credit will help in cultivating a green economy and provide greater incentive for sustainable technology companies to locate or expand their operations here in California instead of other less costly states.
AB 765 reaffirms that California is the preeminent place to conduct research and development and helps to retain and grow jobs in some of California’s most distinctive and cherished industries.
Action Needed
The bill is scheduled to be considered by the Assembly Revenue and Taxation Committee on May 4.
The CalChamber urges members to ask Assembly committee members to support AB 765.
Staff Contact: Kyla Christoffersen
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