Latest news with #R&E
Forbes
12-05-2025
- Business
- Forbes
House Bill Allows Immediate Expensing For Domestic Research
The House Ways and Means Committee released additional information regarding their proposed tax bill, named 'The One, Big, Beautiful Bill', which includes needed modifications to the requirement that research and experimental ("R&E") expenditures be capitalized. While domestic R&E expenditures were provided relief, no favorable adjustments were provided to foreign R&E. Research, experiment and trial being done by a scientist in a lab, science facility or hospital. The House bill provides domestic R&E can be fully deductible for expenditures paid or incurred in taxable year beginning after December, 31, 2024. However, the ability to immediately expense R&E capitalized assets for taxable years beginning after December 31, 2021 and before January 1, 2024 is not provided . In addition, the House provision does not call for permanence, but instead extends the ability to immediately deduct domestic R&E for expenses incurred for calendar year taxpayers until December 31, 2029. Examples of qualifying R&E costs include salaries for those engaged in R&E efforts, overhead incurred to operate and maintain research facilities, and materials and supplies used and consumed in the course of R&E. In addition, domestic R&E expenditures under the bill include eligible expenses incurred for the development of software. The proposed bill also allows domestic R&E expenditures to be recovered upon the disposition, retirement, or abandonment of the R&E expenditures. Under previous guidance, if there was a disposition of an R&E capitalized asset, the transferor was required to maintain the R&E capitalized asset and continue to deduct the R&E capitalized amount over the remaining amortization period. However, if a corporation ceased to exist for federal income tax purposes in a transaction described in IRC Section 381(a), the acquiring corporation was required to continue to amortize the transferor corporation's unamortized R&E expenditures over the remainder of the transferor corporation's applicable IRC Section 174 amortization period. This change would be applicable to taxable year beginning after December, 31, 2024. Alternatively, the proposed law allows for a taxpayer to make an election for the ability to charge domestic R&E expenditures to a capital account and ratably amortize them over the useful life or the research, but for not less than a period of at least 60 months. The election must be made on a timely filed return, and is binding for all subsequent taxable years unless approved by the Secretary of Treasury. Alternatively, a taxpayer is still allowed to elect to capitalize and recover the domestic R&E expenditures over 10 years on a timely filed tax return, which can be made annually. A transition rule requires taxpayers to adopt the changes to domestic R&E expenditures as an automatic accounting method change on a cutoff basis for taxable years beginning after December 31, 2024. Foreign R&E expenditures still are required to be capitalized and amortized over 15 years beginning with the midpoint of the taxable year in which the taxpayer pays or incurs the expenditure. In addition, foreign R&E capitalized assets will continue to be amortized, with no immediate deduction being allowed, if the asset is is disposed, retired, or abandoned. The proposed law clarifies that for transactions related to foreign R&E that is disposed, retired or abandoned after May 12, 2025 the amount realized cannot be reduced for the R&E capitalized asset. The House Ways and Means committee is expected to start the mark-up the bill on May 13th, and 2 pm EST, with the potential of presenting the bill to the House floor for approval next week.
Yahoo
21-02-2025
- Business
- Yahoo
Trump administration locks MPCA out of $200 million in federal grants
President Donald Trump speaks to reporters in the Oval Office of the White House on Feb. 3, 2025, in Washington, D.C. (Photo by) The Trump administration has locked Minnesota out of $200 million in federal grants awarded to the state last year for community-based climate projects, leaving projects in limbo and underscoring the uncertainty and disruption unleashed by Trump's early budget cutting. Last July the U.S. Environmental Protection Agency awarded the money for initiatives to reduce greenhouse gas emissions, including climate-friendly farm practices, peatland restoration, energy efficiency, vehicle electrification and more. 'This funding will have a transformational impact on Minnesota, from farms to food shelves across the state,' Katrina Kessler, commissioner of the Minnesota Pollution Control Agency, said at the time. 'This investment will reduce greenhouse gasses while improving air quality, advancing new technologies, building food security and sovereignty, and directing benefits to low-income residents and communities of color.' Now, the Minnesota Pollution Control Agency says the Trump administration has locked them out of those funds, and projects that had been planning on using the funding to get off the ground are scrambling to find alternatives. 'Unfortunately, the already-approved funding has not been reliably available to us to access since early February,' an MPCA spokesperson said. 'This is deeply concerning and could have long-term impacts on our mission of protecting the environment and human health.' The EPA did not respond to a request for comment. One project that had been banking on those funds is a food waste processing plant in Scott County, operated by Ramsey/Washington Recycling & Energy, or R&E. The project has been in the works for seven years, according to Melissa Finnegan, the agency's director of strategic partnerships. Construction, by Shakopee-based Dem-Con, is slated to begin this spring. It would process 75,000 tons per year of organic and food waste, converting it to enough natural gas to serve thousands of homes and reducing total carbon emissions by an amount equivalent to taking 6,000 cars off the road. 'The loss of a dedicated $10 million in funding for this $100 million project puts the entire endeavor at risk,' Finnegan said. 'If this $10 million is suddenly unavailable, the responsibility for the costs would be shifted to R&E, and ultimately the residents of both counties.' Until recently, the MPCA had been planning on using the funds for expanding water quality and soil health programs, helping businesses transition to cleaner refrigerants, scaling up food waste programs, restoring 10,000 acres of peatland, and helping economically disadvantaged communities improve food security. 'Since the climate-smart food systems initiative was announced in July 2024, we've heard from farmers, food processors, local governments and community-based food organizations who are excited to get this work started,' MPCA Climate Director Kate Knuth said recently. Shortly after taking office, however, President Trump attempted to freeze billions of dollars in federal funding and payments that had already been authorized by Congress. Federal judges have issued temporary restraining orders to keep federal funds flowing while challenges work their way through the courts, but the administration has frequently ignored those orders. The Scott County waste processing plant is just one of thousands of projects across the country that are now in jeopardy as a result of the administration's actions. 'The uncertainty and overall lack of communication from the federal government regarding these funds has been particularly frustrating as we look to getting this project started,' Finnegan said. She added that MPCA has told her that they do not anticipate the funds being made available again.
