News

January 31, 2011

Credit Where Due, Says Senator

By: by Larry Rulison, Business Writer, Times Union

Source:

WATERVLIET -- U.S. Sen. Kirsten Gillibrand believes that 20 percent is the magic number for the nation's high-tech economy.

New York's junior senator was at Watervliet Arsenal on Friday to announce a new legislative proposal to make the federal research and development tax credit permanent. The credit, which allows companies to write off as much as one-fifth of their R&D spending, has been extended 14 times by Congress, but never made permanent.

Gillibrand and others said Friday that U.S. companies have never been able to rely on the tax credit and consequently have been holding back on long-term investment. The senator estimates that by making the tax credit permanent -- and simplifying it to make it a flat 20 percent credit for all -- research investment in the country could leap by $7.5 billion annually. That new spending would create an additional 162,000 jobs, she said.

"Businesses haven't been able to count on it being in place," Gillibrand said.

Gillibrand chose to launch the legislative campaign at Watervliet Arsenal because the Army manufacturing base has become a high-tech hub over the past several years, developing unused buildings into laboratories and other space for outside companies.

Gillibrand spoke outside a facility operated by a company called Total Facility Solutions that makes high-tech piping used in clean rooms and semiconductor facilities. On Friday, workers inside the TFS clean room were assembling pipes that will soon be transported to Fab 8, the computer chip factory being built by GlobalFoundries at Luther Forest Technology Campus in Malta.

TFS is a subcontractor on the project and is working with other companies, including General Electric Co., which is building a water purification plant for the factory. TFS is affiliated with M+W U.S., the general contractor on the project.

Gillibrand's office estimates that 2,000 New York companies would take advantage of the tax credit, including a company called Solid Sealing Technology, a tenant at the arsenal.

SSL cofounder Alan Fuierer said his company, which makes parts for microscopes and other high-tech devices, will enter into an intense R&D period as it pushes into new markets. He said that would be easier with permanent tax credits.

"We will continue to push the limits of our technology," Fuierer said.

Alain Kaloyeros, chief executive of the College of Nanoscale Science and Engineering, which has brought tenants to the arsenal, said tech companies push 20 percent of their revenues into R&D, which is why the 20 percent tax credit is so important. "It's a matter of innovate or die," Kaloyeros said.

Read more: http://www.timesunion.com/default/article/Credit-where-due-says-senator-984177.php#ixzz1Cd6vYh9w