U.S. Reps. Dean Phillips (D-MN) and Jackie Walorski (R-IN) introduced legislation that would provide relief for startup businesses ineligible for other types of aid passed by Congress during the COVID-19 pandemic.
The IGNITE American Innovation Act would help these small and mid-sized growth companies left out of the CARES Act and other stimulus packages to monetize up to $25 million of accumulated net operating losses (NOLs) and R&D credits.
“The Great Recession did severe and lasting damage to American entrepreneurship,” Phillips said. “We cannot and must not allow the COVID-19 pandemic to do the same. This bipartisan bill will deliver long-overdue relief to our nation’s innovators and ensure that they continue to develop the lifesaving and game-changing technologies our economy and communities rely on.”
Further, it would let them double the value of R&D credits generated by research into products to prevent, diagnose, or treat COVID-19 and future pandemic threats.
“High-tech innovators like medical device manufacturers in northern Indiana will be vital to rebuilding our economy after the COVID-19 pandemic,” Walorski said. “Providing tax relief to cutting-edge startups is a commonsense way to ensure they can continue to develop life-saving technologies, discover treatments and cures, and create good jobs. I’m grateful to work across the aisle to boost small and mid-size businesses and drive innovation when we need it more than ever.”
The bill has gained the support of several industry groups, including Medical Device Manufacturers Association, TechNet, Medical Alley Association, Center for American Entrepreneurship, Angel Capital Association, Technology Councils of North America, Biotechnology Innovation Organization, Advanced Medical Technology Association, and National Venture Capital Association.
“IGNITE will accelerate investments in startup ecosystems across the country to power the jobs and economy of the future. This bipartisan legislation will provide immediate liquidity to our most innovative companies that must be used to finance job creation, R&D, or facility construction, creating more economic opportunity, and boosting American competitiveness,” Bobby Franklin, president of the National Venture Capital Association, said.
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