The American Recovery and Reinvestment Act of 2009 (ARRA), which is more commonly known as the federal government’s economic stimulus package, includes a feature that allows companies to obtain tax-exempt financing for research and development activities a limited time.
The tax-exempt financing method of using “small issue bonds” has been available to manufacturing facilities for some time. However, under the ARRA, after February 17, 2009 and in 2010, small issue bonds are also available for a “facility which is used in the creation or production of intangible property which is described in Section 197(d)(1)(C)(iii)” — i.e., patents, copyrights, formulae, processes, designs, patterns, know-how, formats, or similar items.
For more details about this financing option and its requirements, my partner Gordon Downing has published a summary of the new financing option. For the summary and more information, click here.