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July 20, 2020

Research, Testing Incentives Emerge As Virus Bill Contenders

 House Republicans are looking to rally bipartisan support for a batch of new proposals for tax incentives to support medical research, healthy workplaces and coronavirus testing as potential components of an emerging pandemic response package on Capitol Hill.

Rep. Kevin Brady, R-Texas, ranking member on the House Ways and Means Committee, has been working with other GOP tax writers to promote a half-dozen proposals introduced over the last two weeks in the hope that some of them might be included in the next bicameral package to address the pandemic’s effects. Both parties are looking to quickly resolve differences between GOP-backed business incentives and Democratic relief measures passed by the House in the Health and Economic Recovery Omnibus Emergency Solutions Act, or Heroes Act, before the July 31 expiration of expanded jobless aid.

The new bills could move on their own or as part of a compromise bill that will be hashed out in Congress to counter economic fallout from the COVID-19 pandemic. Supporters said they believed several new parts of the plan could attract bipartisan support in looming bicameral negotiations on the pandemic-related legislation, including proposals for a healthy workplaces tax credit, a refundable business tax credit and research incentives.

“We will have a healthy economy package,” Brady told Law360.

Rep. Tom Rice, R-S.C., has proposed H.R. 7615, which would provide a new refundable healthy workplaces tax credit that would cover 50% of the costs of anti-coronavirus measures including personal protection equipment, extra cleaning and workspace reconfiguration. The credit would be capped at $1,000 per employee for the first 500 workers, $750 apiece for the next 500 workers and $500 for each additional worker.

“We want to be part of an overall package to get the American economy moving again,” Rice told Law360.

Another new proposal by Rep. David Schweikert, R-Ariz., would create a refundable 50% tax credit based on the average number of a company’s full-time workers — capped at $250 or $500 per worker depending on the size of the business — to cover the costs of testing for the SARS-CoV-2 coronavirus or for COVID-19. Schweikert said his proposal was needed to “empower businesses to make expansive testing of their employees possible while helping to support a healthy labor force.”

The House GOP plan also includes two proposals by Rep. Devin Nunes, R-Calif., to create an additional 14% research and development tax credit for certain qualified medical research expenses and to make refundable a portion of the research tax credit for startups with gross receipts of $1 million and with similar medical research expenses.

Brady said such proposals were “vital for America’s future in order to increase investment in American innovation — leading to more cures not just to COVID-19, but for any future health crisis our country may face.”

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