Congress cuts R&D taxes for startups and tech firms, costing billions in revenue.
S. 1639 — American Innovation and Jobs Act · Filed by Todd Young (R-IN) · 35 cosponsors · Introduced May 7, 2025 · Referred to committee
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What it does
This bill restores immediate tax deductions for research and development spending (instead of requiring companies to capitalize and amortize those costs over time), and significantly expands tax credits for startups and small businesses conducting research. Specifically, it raises the refundable research credit cap from $250,000 to $750,000 by 2035, extends eligibility from 5 years to 8 years, and raises the gross-receipts threshold for qualifying as a small business from $5 million to $15 million. The primary beneficiaries are R&D-intensive companies, startups, and small businesses; the cost is foregone federal tax revenue.
Why we flagged it
The bill's operative mechanism is a direct reduction in tax liability for companies conducting research—through both immediate expensing (reducing taxable income) and expanded refundable credits (direct cash-like tax offsets). This is a tax expenditure (foregone revenue) benefiting a specific class of private entities.
What the text implies
- The immediate expensing provision (§174 restoration) applies retroactively to tax years beginning after December 31, 2021, potentially generating large refunds or credits for companies that capitalized R&D costs under prior law and may now amend prior returns.
- The refundable credit expansion is phased in over a decade (2025–2035), creating a long-term revenue commitment that future Congresses cannot easily reverse without explicit legislative action.
- The gross-receipts threshold increase from $5M to $15M and the 8-year eligibility window may allow venture-backed startups and growth-stage companies to claim credits far longer and at higher revenue levels than originally intended for 'small business' relief.
- The bill contains no sunset clause, income-phase-out, or clawback mechanism, meaning high-revenue companies can claim the full credit indefinitely if they meet the technical definition of 'qualified small business' at inception.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill provides substantial tax relief to companies and startups engaged in research activities, funded entirely by foregone federal revenue that would otherwise support public services, infrastructure, or deficit reduction. While R&D investment may generate long-term economic benefits, the immediate and direct effect is a transfer of public resources to private entities with no offsetting public return or accountability mechanism.
Who stands to gain
- pharmaceutical and biotechnology companies
- software and technology startups
- semiconductor manufacturers
- aerospace and defense contractors
- industrial R&D-intensive manufacturers
- venture-backed growth-stage companies
Named in the bill
Internal Revenue Service (IRS), Internal Revenue Code (IRC) §174, §41, §280C, §3111, U.S. Department of the Treasury, qualified small businesses, startups and new businesses
Where it stands
35 cosponsors: 17 Democrats, 17 Republicans, 1 Independents.
- May 7, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- May 7, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
24 lobbying clients named this bill on 26 disclosure filings across 3 quarters, Dec 2025 to Jun 2026. Those filings disclosed $8,960,377 in lobbying spend. A filing names 6 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 97% of bills with at least one filing.
Todd Young, the sponsor, reported $704,220 in PAC receipts in the 2026 cycle. $24,500 of that came from 7 PACs tied to these lobbying clients.
- Dell Technologies Inc — $2,970,000 on 2 filings
- Boeing Company — $2,770,000 on 1 filing
- Astrazeneca Pharmaceuticals Lp — $1,680,000 on 1 filing
- Texas Instruments Incorporated — $354,000 on 1 filing
- Tax Reform Coalition — $250,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (11,218 characters) on Jun 3, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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