Manufacturing is an industry built on innovation—but with a recent change in tax law, manufacturers are encountering a new and major obstacle to the critical research and development investments they need to make in order to compete at home and around the world.
The background: Up until January 2022, a business could deduct 100% of their R&D expenses in the same year those expenses were incurred. But a change to the law that took effect this year now requires businesses to spread those deductions over a period of years, making investment in innovation more expensive.
The manufacturer: At Brewer Science—a Missouri-based manufacturer in the semiconductor industry—this issue has become an urgent challenge. The company is a top producer of materials needed to make semiconductor chips.
- In such a fast-moving industry, staying competitive requires nonstop innovation—and that demands constant investment in new products and processes. According to Brewer Science Executive Vice President Dan Brewer, a significant percentage of the company’s revenue goes back into R&D every year.
- “Semiconductors are everywhere, and new generations are constantly being created,” said Mr. Brewer. “The only way to compete abroad in our industry is to out-invent the competition.”
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