Congress Must Restore Full Current Year R&D Expensing

Fragrance Creators continues to strenuously advocate for the restoration of full current year R&D expensing—consistent with the Administration’s bipartisan goal of accelerating innovation and building a sustainable economy. The fragrance industry reinvests a significant amount of capital into R&D—expanding cutting edge science, increasing well-paying jobs, and driving product superiority in the consumer product goods sector. Since 1954, companies in the U.S. have been able to deduct their R&D expenses in the year incurred. The Tax Cuts and Jobs Act of 2017 eliminated annual expensing of R&D and, beginning this year, requires capitalization and amortization of such expenses over five years. Losing the full annual deduction for R&D raises the cost of investment for the fragrance industry, discouraging green R&D, and reducing the level of economic output. Yesterday, we signed on to a letter led by our allied partners, the National Association of Manufacturers, urging the reinstatement of full current year R&D expensing to support innovation and secure American competitiveness as we amplify our efforts with members of Congress and the Congressional Fragrance Caucus.

Find the full letter below.

To learn more about R&D expensing and the fragrance industry, see our fact sheet below.