Title: Domestic Research Enhancement Act of 2017
Policy area: Taxation

Summary:
Domestic Research Enhancement Act of 2017
This bill amends the Internal Revenue Code to allow a research tax credit for 35% of in-house research expenses (contracted research expenses), including any research funded by any grant or contract or by another person or governmental entity.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1234 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 1234

  To amend the Internal Revenue Code of 1986 to make certain contract 
               research eligible for the research credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 27, 2017

 Mr. Meehan (for himself, Mr. Holding, and Mr. Butterfield) introduced 
  the following bill; which was referred to the Committee on Ways and 
                                 Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to make certain contract 
               research eligible for the research credit.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Domestic Research Enhancement Act of 
2017''.

SEC. 2. RESEARCH CREDIT EXPANDED TO MAKE CERTAIN RESEARCH ELIGIBLE FOR 
              THE CREDIT.

    (a) In General.--
            (1) Section 41(b)(1) of the Internal Revenue Code of 1986 
        is amended by striking ``and'' at the end of subparagraph (A), 
        by striking the period at the end of subparagraph (B) and 
        inserting ``, and'', and by adding at the end the following new 
        subparagraph:
                    ``(C) contracted research expenses.''.
            (2) Section 41(b) of such Code is amended by adding at the 
        end the following new paragraph:
            ``(5) Contracted research expenses.--
                    ``(A) In general.--The term `contracted research 
                expenses' means 35 percent of the in-house research 
                expenses for the taxable year paid or incurred by the 
                taxpayer contracted to do research, but only when the 
                contracting taxpayer pays or incurs contract research 
                expenses for such taxable year.
                    ``(B) Funded research allowed.--For purposes of 
                this section, the prohibition contained in subsection 
                (d)(4)(H) shall not apply.
                    ``(C) Denial of double benefit.--The amount of any 
                in-house research expenses taken into account under 
                this section (without regard to this paragraph) by a 
                contracted taxpayer for a taxable year shall be reduced 
                by the amount of in-house research expenses taken into 
                account by such taxpayer under subparagraph (A) for 
                taxable year.''.
    (b) Effective Date.--The amendments made by this Act shall apply to 
taxable years ending after the date of the enactment of this Act.
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