WASHINGTON – The Semiconductor Industry Association hailed final passage of legislation to permanently extend the R&D tax credit.

A permanent credit will offer US semiconductor companies certainty the country will continue to offer an incentive for domestic research, allowing them to plan investments for years to come, the SIA said.

In 2014, the US semiconductor industry invested about one-fifth of its revenue into research and development.

“A permanent R&D credit is a huge win for the semiconductor industry,” said John Neuffer, president and CEO of the SIA. “No industry invests a higher percentage of revenue in research than the US semiconductor industry. Sustained, long-term research and innovation have been the foundations of the US semiconductor industry’s leadership in the world marketplace for semiconductors. By making the credit permanent, this legislation will enhance the ability of the US semiconductor industry to innovate and continue to improve our daily lives.”

The SIA also supports the extension of bonus depreciation and the so-called “CFC look-through” rule. The semiconductor industry directly employs nearly 250,000 people in high-skilled, high-wage jobs across America, and a large number of these jobs are in the areas of research and innovation, says the firm. Since more than 70% of credit dollars are used to pay the salaries of high-skilled R&D workers in the US, this legislation will help support research jobs at US semiconductor companies.

“Making the R&D credit permanent is a key step to improve America’s ability to innovate and maintain technological leadership,” Neuffer said. “We look forward to working with Congress to enact comprehensive tax reform that will strengthen research incentives, lower the corporate rate, and move toward a territorial international system that does not discourage US companies from investing overseas income in the US.”