What does the U.S. military do when an expensive asset like a plane or a weapons system begins to break down?
Often, it turns to companies like Parts Life, Inc.—an innovative manufacturer that can reverse-engineer obsolete parts and help find solutions for hard-to-replicate products. But after a tax law change went into effect in 2022, the New Jersey–based manufacturer is facing increased costs for research and development, creating a barrier to the kind of innovation that is the focus of its business.
The change: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to spread their deductions out over a period of five years, making it more expensive to invest in growth and innovation.
A focus on innovation: For Parts Life, coming up with new ideas is an essential, daily activity.
- “Parts Life is built around being a solutions provider,” said Parts Life President and CEO Sam Thevanayagam. “We are providing solutions for very expensive and mission-critical assets that are extremely strategic for the defense of the nation, but are also older—so their parts are not necessarily being supported.”
- “That’s where we come in to do reverse engineering. So, we’re looking at an old problem, but using innovation to solve it going forward.”
A benefit for savings: By helping the military extend the life of its expensive assets, Parts Life also helps taxpayers.
- “We’re taking care of the warfighter and the taxpayer,” as Thevanayagam puts it.