A new bill introduced this week would reduce the compliance burdens faced by biotech companies under Sarbanes-Oxley.
IndustryWeek reported on the bill as follows:
A provision in the HOME Act directs the Securities and Exchange Commission to provide a threshold definition for smaller public companies thereby providing an objective standard as to who is eligible for a scaled audit under the newly adopted Auditing Standard No. 5 (AS-5) and Section 404 of the Sarbanes-Oxley Act of 2003. . . .
The bill enables companies without federal tax liability to increase their capital investments by claiming some portion of their unused R&D and Alternative Minimum Tax (AMT) credits. Under this provision, companies would elect to accelerate R&D and AMT credits in lieu of bonus depreciation. Allowing companies to accelerate the recovery of some portion of unused R&D and AMT credits through new capital investments will help maintain economic growth by encouraging business investments and job creation. The bill also provides for a two-year R&D tax credit extension which expired at the end of 2007
The Biotechnology Industry Organization ("BIO") issued a press release praising the bill, in which BIO President and CEO Jim Greenwood stated as follows:
"Biotechnology researchers are creating innovative technologies that provide hope to patients worldwide. But most biotech companies are small start-ups, years away from having products on the market. So with little to no product revenue, and an undefined definition of a smaller public company, these companies have been absorbing outsized audit and compliance costs – revenue that could otherwise go to developing life-saving therapies."
To check out the full text of the BIO press release, click here.
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