Tax and Fiscal Environment
Tax policy and financial incentives greatly influence private investment in the life sciences. Though comprehensive tax reform is unlikely the remainder of the 112th Congress, CHI will support efforts to repeal the medical device tax and address the impact of any tax reform proposals on life sciences investment, innovation, job creation and competitiveness. Additionally, CHI will continue to advocate for the federal research and development (R&D) tax credit, which helps encourage companies to make high-risk investments, spurring medical innovation and job growth. The requirement of annual extensions and the resulting uncertainty surrounding the future of the credit have made long-term investment planning difficult for companies. According to the Information Technology and Innovation Foundation, the United States ranks No. 17 in R&D tax incentives out of the top 30 Organizations for Economic Co-Operation and Development (OECD) countries. The United States ranked No. 1 as recently as the 1990s. Finally, CHI will monitor the recently reauthorized Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) programs, which allows VC majority-owned life sciences firms to compete for up to 25 percent of SBIR grants from the National Institutes of Health, Department of Energy and National Science Foundation.