Congress passes tax package, includes extension of R&D Tax Credit and suspension of medical device tax

December 21, 2015

MHTA — With the end of the year approaching, federal lawmakers passed a $650 billion federal tax package. President Obama signed the legislation on Friday. The package includes, among other provisions, a permanent extension of the federal research and development (R&D) tax credit and a two-year suspension of the medical device tax. These provisions are great news for Minnesota’s high-tech and medical technology communities.

The federal R&D tax credit which, like Minnesota’s R&D tax credit, allows qualified businesses to receive a tax credit on their federal tax return for qualified research and development activities. The federal R&D tax credit has been temporarily extended 16 times since it was enacted in 1981. A permanent extension of the credit will provide tax certainty to Minnesota’s – and the nation’s – high-tech, innovative companies while also encouraging investment in research and development activities.

The federal tax package also includes a two-year suspension of the 2.3-percent medical device tax enacted under the Affordable Care Act (ACA). A temporary suspension of the medical device tax will allow Minnesota’s medical device companies to make stronger investments in the research and development of new medical technologies.


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