alliantgroup and the R&D Tax Credit: Past, Present, and Future

At alliantgroup, we understand that the Research & Development (R&D) Tax Credit is the most important incentive for U.S. businesses, hands down. Since its humble beginnings as a provision of the Economic Recovery and Tax Act of 1981, it has helped companies survive economic downturns, create new jobs and invest in exciting new technologies. Understanding the origins and history of the R&D Tax Credit can help us identify the kinds of policies we should implement to ensure a future of sustained economic growth.

The R&D Tax credit was born out of a concern that decreased research spending had slowed economic growth and hindered competition. In 2003, additional regulations were finalized which terminated the law’s “Discovery Rule,” a requirement that a company’s research activities be “new to the world” to qualify for the tax credit. With this restrictive rule abolished, Dhaval Jadav and Shane Frank recognized a tremendous opportunity for U.S. companies. They formed alliantgroup to help small to mid-market businesses that lacked the time, resources and expertise to take advantage of their newfound access to the powerful government incentive.

The R&D Tax Credit and alliantgroup have helped many companies save money and create jobs, but there is still a need for increased innovation in the private sector. In the U.S., declining business dynamism and an overall drop in innovation metrics indicate that our government could be doing more to foster a strong economy. Improving awareness of and accessibility to the tax credit will help, as will increasing the value offered by the credit. These are important first steps in creating the kind of competitive economy that will allow U.S. businesses to prosper.