The technology sector's relationship with this bill is complicated. New R&D amortization requirements increase near-term tax burdens, while expanded credits for domestic semiconductor manufacturing and AI safety research provide targeted relief.
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R&D Amortization: The Critical Change
Prior to this bill, software development costs could be expensed immediately. The new rules require amortization over 5 years for domestic R&D. For a startup burning $3 million annually on engineering salaries, this could increase taxable income by $2.4 million in Year 1.
Core Takeaway
Startups with existing net operating loss carryforwards may be able to absorb the impact without near-term cash tax payments. Companies that have exhausted their NOL runway need to model the effect immediately.