WASHINGTON--(BUSINESS WIRE)--Today, Senators Robert Menendez (D-NJ) and Pat Toomey (R-PA) introduced the Start-up Jobs and Innovation Act, which would modernize the U.S. tax code to stimulate investment in groundbreaking R&D at start-ups and growing companies. Small business innovation is fundamental to the long-term growth of the U.S. economy. This legislation is supported by the Coalition of Small Business Innovators (CSBI), a group of 18 organizations representing highly innovative small businesses.
“The Coalition of Small Business Innovators applauds the legislation introduced today by Senators Menendez and Toomey,” said Katherine Hamilton, Policy Director at the Electricity Storage Association. “The Start-up Jobs and Innovation Act will promote long-term investment in innovative industries, providing the time needed to develop the next generation of technologies and breakthroughs, while creating high-quality American jobs and ensuring America remains competitive on a global scale.”
America’s small, pre-revenue businesses are working to solve the critical challenges that we face and rely on private investment to bring these ideas to the world. The development process for a single breakthrough technology can cost more than $1 billion and take upwards of 10 years. Without a supportive policy environment, some potentially life-changing seed and start-up technologies may never be realized because private capital is not rewarded or incented.
The Start-up Jobs and Innovation Act would allow companies to partner with their investors to conduct research through R&D Partnership Structures. Only start-up and small companies dedicated to R&D would be eligible to utilize R&D Partnership Structures, so investors will be incentivized to invest at an earlier stage, when the capital is most needed.
An independent study conducted by Ernst & Young found the R&D Partnership Structures proposal included in the bill would increase investment by an estimated $10.3 billion per year, resulting in 156,000 additional jobs at affected companies. The Start-up Jobs and Innovation Act also includes important reforms to the capital gains treatment of small business stock, business expensing for growing companies, and rules governing small firm accounting methods.
“The Start-up Jobs and Innovation Act is an important step toward ensuring that America’s small businesses are able to continue their breakthrough research,” said Vincent Caprio, Executive Director of the NanoBusiness Commercialization Association. “Private investment is key to the success of next generation innovators, and this legislation will support vital capital formation for emerging companies.”
The Coalition of Small Business Innovators is a national, non-partisan coalition of organizations dedicated to stimulating sustained, private investment in small companies focusing on the development of transformative, life-changing new technologies. With small businesses working to advance research, development, and manufacturing of technologies that have the potential to solve critical economic, environmental, and societal challenges around the world, we seek to educate lawmakers and the public about the value of stimulating investment in these companies. More information about the coalition can be found at: www.smallbusinessinnovators.org