21st Century Investment Act of 2017

To amend the Internal Revenue Code of 1986 to make permanent the credit for increasing research activities, to increase such credit for amounts paid or incurred for qualified research occurring in the United States, and to increase the domestic production activities deduction for the manufacture of property substantially all of the research and development of which occurred in the United States. 1. Short title This Act may be cited as the 21st Century Investment Act of 2017 2. Increase in research credit for contracted research with United States businesses (a) In general Section 41 (i) Special rule for contracted research with United States manufacturing business (1) In general If the taxpayer elects the application of this subsection, subsection (a)(1) shall be applied by substituting 25 percent 20 percent (2) Qualified United States research expenses For purposes of this subsection, the term qualified United States research expenses (3) Separate application of section In the case of any election of the application of this subsection, this section shall be applied separately with respect to qualified United States research expenses. . (b) Effective date The amendments made by this section shall apply to amounts paid or incurred for taxable years beginning after the date of the enactment of this Act. 3. Increase in domestic production activities deduction for manufactured property researched and developed in United States (a) In general Section 199(d) (10) Special rule for certain manufacturing (A) In general In the case of qualified production activities income attributable to the manufacture or production of qualifying production property substantially all of the research and development of which occurred in the United States, subsection (a) shall be applied by substituting 15 percent 9 percent (B) Special rule when taxable income used to determine deduction In the case of any taxable year for which the taxpayer’s qualified production activities income exceeds the taxpayer’s taxable income (determined without regard to this section), the amount of taxable income to which the 15 percent amount in subparagraph (A) applies under subsection (a)(1) shall be an amount equal to the amount which bears the same ratio to such taxable income (as so determined) as— (i) the amount of qualified production activities income of the taxpayer for the taxable year which is attributable to the manufacture or production of qualifying production property substantially all of the research and development with respect to which occurred in the United States, bears to (ii) all qualified production activities income of the taxpayer for the taxable year. (C) Termination This paragraph shall not apply to taxable years beginning after December 31, 2024. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: 21st Century Investment Act of 2017 This bill amends the Internal Revenue Code to: (1) modify the tax credit for increasing research activities to allow an increased 25% tax credit rate for expenses for research, substantially all of which occurs in the United States; and (2) increase to 15%, through 2024, the tax deduction for income attributable to domestic manufacturing production activities for which substantially all of the research and development occurred in the United States.