Help Repeal Section 174 Innovation Tax

The “Innovation Tax” is a result of the 2017 Tax Cuts and Jobs Act (TCJA) and requires amortization of Research and Experimentation (similar to R&D) expenses, starting with tax year 2022. For R&D conducted in the US, only 10% of the costs can be expensed in the year in which they are incurred (year 1), followed by 20% for each of the next 4 years (years 2-5), and then the final 10% in year 6. While this is a burden for all companies who conduct R&D, it is especially devastating for early-stage, pre-revenue companies, who may have to pay the Innovation Tax before they have any profit or any means with which to pay the tax. According to a 2019 report by Ernst & Young, the Innovation Tax will result in approximately $4 Billion per year in decreased R&D spending, starting in 2022 – for perspective, this is the size of the entire SBIR/STTR program. Unfortunately, early-stage businesses typically do not have funds to engage in expensive lobbying efforts. Our objective is to provide a central resource for businesses impacted by the Innovation Tax, so that we can collectively tell our story to Congress, and benefit from our strength in numbers.

Read dozens of heartbreaking stories about how the Innovation Tax has impacted many of the most innovative businesses in our nation.

Read the Stories

As of April 2024, a bill that would fix the Innovation Tax remains stalled in the Senate. It is essential that we all continue to reach our to our Senators to share our stories about how the Innovation Tax is devastating entrepreneurship in America.

January 31, 2024 – THE HOUSE APPROVES The Tax Relief for American Families and Workers Act that retroactively repeals the Innovation Tax by a vote of 357-70! The Senate will be a much bigger challenge, but TOGETHER we can do this! CALL your Senator today to let them know how critical this bill is for your business!

1) CALL your Senators on Capitol Hill: 202-225-3121

2) Email your Senators using this convenient form, provided by the Clean Energy Business Network!

1. Call your Members of Congress

Urgent Action: Call your Reps directly at 202-225-3121. Find your Senators here and your House Rep here (enter your zip code top right then click to their website and click “Contact”)

2. Sign Letter to Congress to Repeal Innovation Tax 

Update: As of December 4, 2023, we have reached 1000+ co-signers from all 50 States and have sent the letter to Congress!!!
More co-signers are welcome!!  Each additional co-signer makes our case even more compelling! SIGN HERE!

3. Share your Story of how the Innovation Tax has impacted your company with
We are collecting these stories to share with Congress and media to portray the dire impact of the Innovation Tax on individual companies throughout the US.

4. Engage the Media

  • Contact TV/radio/print media to share your story.
  • Post your story on social media and tag Ways & Means and Senate Finance Committees and their Chairs and Ranking Members:
      • R: @WaysandMeansGOP  |  @SenFinance  |  @RepJasonSmith  |  @MikeCrapo
      • D: @WaysMeansCmte  |  @SenateFinance  |  @RepRichardNeal  |  @RonWyden

5. Send Your Story to SBIR/STTR Agencies

  • Use “SECTION 174” as email subject line and explain the harmful impact of the tax on your company.

+ All SBIR/STTR recipients:
+ NSF SBIR/STTR recipients:
+ NIH SBIR/STTR recipients:
+ DOD SBIR/STTR recipients:

Please share all your outreach with so we can collaborate and spread the word on Capitol Hill!

“It’s the most un-American thing I’ve ever heard of, to tax innovation”

– Melissa DeRosier, CEO, 3C Institute and 3C Family Services