LOC News
SB 5 – Research and Development Tax Credits
This week, the Joint Committee on Semiconductors held the first hearing on SB 5, which is intended to advance a research and development (R&D) tax credit. This legislation is effectively a restart of Oregon’s R&D tax credit that was in place prior to 2018. Unfortunately, over the last five years, investment in Oregon-based research has flatlined or declined, while states with an R&D tax credit have flourished. Some estimates suggest Oregon lost out on more than $800 million in R&D investments to other states in the first year that Oregon discontinued its R&D tax credit program.
SB 5 is an important component of this session’s semiconductor package. There is no question that research and development is an ongoing part of any industry, especially within the semiconductor sector. The only real question is where the research will be done. It’s clear that states with an R&D tax credit in place continue to invest, generate jobs, and leverage long-term investments.
The LOC will be supporting this tax credit along with our semiconductor coalition members. Much of the semiconductor coalition’s work will be spent on the missing elements of the semiconductor package. The more cities that are actively supporting all the elements of this package, the better the chances of achieving a comprehensive package. Reinstating the R&D credit now will help companies take advantage of the federal CHIPS Act and maintain Oregon’s place as a leader in semiconductor manufacturing.
Contact: Jim McCauley, Legislative Director - jmccauley@orcities.org
Last Updated 4/21/23