Tax

NAM: Sen. Young, H.R. 1 restored immediate domestic R&D expensing, ending the amortization requirement that had been in effect since 2022. You have been one of the Senate’s most dedicated champions of R&D competitiveness through the American Innovation and Jobs Act. How did your years of sustained advocacy help deliver this outcome in the final reconciliation package?

Sen. Young: The American Innovation and Jobs Act laid the foundation for a multiyear, bipartisan effort to restore full and immediate expensing. From the outset, our goal was to make clear that strong R&D incentives are essential to maintaining America’s competitive edge. With the support of my Senate Finance Committee colleagues and active industry partners like the NAM, we built a broad coalition that understood the real-world consequences of the amortization treatment. This sustained advocacy was critical to ensuring this policy was included in the final version of the One Big Beautiful Bill Act.

NAM: The amortization requirement that was in effect from 2022 to 2024 was particularly damaging for manufacturers, who conduct 52% of private-sector research. Now that immediate expensing is restored and prior-year costs can be accelerated, what are Indiana manufacturers or other stakeholders telling you about how this relief changes their investment and hiring plans?

Sen. Young: During the three-year span when businesses had to amortize, I heard from countless Hoosier employers, including many in the manufacturing and life sciences industries, about how the R&D tax treatment was forcing incredibly difficult decisions. These included delaying R&D projects, scaling back hiring for key personnel like engineers and scientists and, in some cases, even considering shifting research activity overseas. That kind of uncertainty is especially challenging for industries that rely on long-term investment cycles.

Now that immediate expensing has been restored, and restored on a permanent basis, there is a renewed sense of confidence. Businesses back home have shared with me that they are moving forward with previously delayed investments, expanding their research operations and accelerating plans to grow their workforce. Those are the types of business decisions we should be encouraging in our tax code.

NAM: Restoring R&D expensing is a major step, but the United States still trails competitors like China in the overall generosity of R&D incentives. What is your honest assessment of where America now stands in the global innovation competition, and what further actions—whether through additional tax policy, increased federal R&D investment or streamlined regulatory pathways—should Congress prioritize to ensure the U.S. remains the world’s leading destination for manufacturing innovation?

Sen. Young: As our global competitors, like China, are expanding their R&D incentives, we simply cannot allow our nation and our economy to fall behind. To remain the world’s leading destination for innovation and advanced manufacturing, we need a more comprehensive approach. That includes increasing federal investment in critical research areas, ensuring our regulatory environment supports the commercialization of new technologies and strengthening workforce development and apprenticeship streams so that we can better connect students and workers to high-demand careers in manufacturing and innovation.

My focus going forward is on advancing policies that not only restore our competitiveness but position the United States to lead in rapidly growing industries like advanced manufacturing, artificial intelligence, quantum and biotechnology.

NAM: Thank you, Sen. Young. What can NAM members do to help manufacturers take advantage of the restored R&D deduction and to support continued investment in American manufacturing innovation?

Sen. Young: I would encourage NAM members to continue engaging with policymakers and sharing examples of how R&D incentives are driving investment, hiring and innovation in their communities. Those real-world stories about the advancements companies are making are incredibly important as we consider future policy decisions.

I’d also urge manufacturers to fully utilize the restored deduction and continue investing in their workforce and research capabilities. By doing so, and by staying engaged in the policymaking process, you can help ensure we build on this progress and continue strengthening America’s leadership in manufacturing.