Recently, exciting developments across the state have earned Ohio the nickname the “Silicon Heartland.” From EV technology advancements in the 6th District to the Intel plant being constructed just to the west, business is booming in Ohio. The innovation and growth that the Buckeye State is experiencing is largely fueled by research and development activity.

Congress has long recognized that research and development provides a catalyst for growth, passing legislation in 1981 to provide dollar-for-dollar credits for such activity. For more than 30 years, these federal tax policies promoting R&D helped to ensure America stayed at the forefront in developing everything from defense technologies to life saving medicines.

Unfortunately, recent changes under IRS Section 174 require the amortization of R&D expenses during a five-year period, instead of allowing their immediate expensing.

This change altered the way businesses have handled investments for decades, and many do not have the cash flow to sit and wait for these unanticipated costs to be realized over time. This increase in the cost of doing business weakens U.S. industry and could cost us our global technological advantage. Many businesses have been paralyzed by this change, reporting their investment in research and development to be at a standstill. This amortization requirement threatens the very existence of some businesses.

Just as I was proud to promote pro-growth policies in the Ohio Senate, I am proud to do the same in Congress. Research and development is the driving force that will continue to advance the economy, create good-paying jobs and allow the United States to lead on a global scale.

It is critical that our tax policies make it easier for American companies to outcompete their international rivals, instead of punishing our most cutting-edge industries for investing in innovation.

While I feel Congress must always act with fiscal responsibility when considering whether to extend tax credits, it is important to remember that these R&D tax credits were passed during the Reagan administration and succeeded in curbing Carter-era economic stagnation. As we continue to face similar economic woes under the Biden-Harris administration, renewing R&D tax credits will provide a major boost to companies competing with China for global economic dominance.

That is why I have co-sponsored the American Innovation and R&D Competitiveness Act of 2023, a bipartisan bill introduced by U.S. Rep. Ron Estes of Kansas that would fully restore the research and development tax credit.

Companies shouldn’t be paying more in taxes because they choose to invest in research and development, and Congress should be doing all it can to help secure and foster these investments.

The amortization requirement for R&D expenses is like sludge in our economic engine, and we are overdue for an oil change. I look forward to the restoration of this common sense approach to taxation, which provides businesses the stability they need to advance our great nation.

(Rulli, R-Salem, represents Ohio’s 6th District in the House of Representatives)