FOR IMMEDIATE RELEASE
February 16, 2022
Illinois Manufacturers’ Association Calls for Research & Development Tax Credit to be Made Permanent and Modernized
SPRINGFIELD – The Illinois Manufacturers’ Association (IMA) is backing legislation that would make permanent and modernize a tax credit that incentivizes manufacturers and other companies to invest in research and development projects in Illinois.
“Illinois manufacturers are constantly striving to bring new and better products to market. From innovative medical treatments to unique food products and advanced technology and machinery, manufacturers produce a variety of goods that we rely on,” said Mark Denzler, president & CEO of the Illinois Manufacturers’ Association. “By modernizing and making permanent the Research and Development Tax Credit, Illinois will be encouraging manufacturers who invest in our communities by launching product studies, researching new technologies and processes, and testing groundbreaking products right here at home. We look forward to working with lawmakers to pass this important measure.”
The legislation increases the Research and Development Tax Credit by providing that the increase in research and development activities shall be based on an increase over 50% of the average of the qualifying expenditures for each year in the base period. Currently, the credit is based on an increase over 100 percent of the average of the qualifying expenditures for each year in the base period. This change modernizes the bill to match changes to the Research and Development Tax Credit at the federal level. Additionally, the bill makes the credit permanent moving forward. The Senate version of the legislation, SB 3453, is scheduled to be heard in the Senate Revenue Committee this afternoon.
“Illinois has a strong manufacturing sector, and Senate Bill 3453 offers opportunities for these businesses to grow, thrive, and reach new heights” said State Senator Donald DeWitte (R-St. Charles). “By incentivizing our manufacturers to invest further in Illinois, we encourage our business leaders to create, invent and expand their businesses, which leads to more jobs. It also makes our manufacturers more competitive in an ever-changing global economy.”
According to the Organization for Economic Cooperation and Development, manufacturers are the nations largest investors in research and development, making up roughly two-thirds of private-sector research and development spending in 2018. However, the U.S. global share of research and development spending dropped from 39.8% to 29.9% in the last two decades, while China’s share of global research and development spending rose from 4.9% to 23.9%. This disparity underlines the importance of supporting policies to invest in American manufacturing, particularly as the pandemic laid bare global supply chain issues that impact our state and nation’s ability to respond in times of crisis.
About the Illinois Manufacturers’ Association (IMA)
The Illinois Manufacturers’ Association is the only statewide association dedicated exclusively to advocating, promoting and strengthening the manufacturing sector in Illinois. The IMA is the oldest and largest state manufacturing trade association in the United States, representing nearly 4,000 companies and facilities. For more information, please visit http://ima-net.org/.
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