THE RESEARCH AND EXPERIMENTAL TAX CREDIT LAW GIVES BUSINESSES A COMPETITIVE WEAPON

Firms can enhance their profitability by acting upon the Research and Experimental Tax Credits provisions of IRS Code Section 41, which became permanent in 2015. The law had been extended year by year since 1986. The... [ view full abstract ]

Firms can enhance their profitability by acting upon the Research and Experimental Tax Credits provisions of IRS Code Section 41, which became permanent in 2015. The law had been extended year by year since 1986. The carry-back and carry-forward provisions allow firms to go back three years to take advantage of credits if they have not previously done so. Previous research has identified six distinctive competencies as leading to competitive advantage. Five of these are impacted by the information presented here.
Use of the tax law provisions is important to business owners, managers, consultants, and academicians. Organizations should incorporate these provisions into their strategic management and planning processes. Consultants should make their clients aware of the provisions of the law. Additionally, the features discussed provide points of departure for research and teaching by academicians. An example of how a firm might take advantage of the Research and Experimental Tax Credit is provided.