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R&D tax puts ‘Main Street’ in jeopardy

As members of MS Consultants, Inc. — an engineering, architectural and planning firm based in Ohio with projects throughout the USA — we’ve watched our work transform from blueprints to the essential infrastructure that powers our communities. But our work, like that of many other engineering firms across the country, is at risk thanks to a devastating tax change.

Firms like ours play a vital role in setting the foundation for local development because we’re closely tied to the people and places where we work. We invest in our communities and have, in turn, seen them grow, change and innovate with the times. However, this tax provision threatens our ability to continue this work — unless Congress acts now to fix it.

Beginning in 2022, a change was made to how businesses expense their research and development costs. As an engineering firm, R&D is the name of the game — it’s how we keep up with the ever-changing world around us. Due to this change, businesses now are forced to deduct their R&D expenses over five years instead of in the same year they occur, removing the financial flexibility that immediate deductions provide.

This prolonged tax liability has become a burden for many engineering firms and will continue to be — especially for businesses of our size and standing. Operating in a highly competitive and publicly regulated environment, firms like ours already operate on thin margins. This undue financial strain won’t affect just day-to-day needs like meeting payroll but the ability to innovate, invest further in our communities and employees, and stay on the cutting edge of the industry.

Creating a business from the ground up takes grit. Our family started MS Consultants in 1963 and has been operating for over 60 years. With perseverance, we’ve been able to invest in our company and expand our offerings to become a mainstay in the communities we serve. But this tax change makes it much more difficult for “Main Street” businesses to succeed.

This amendment to how R&D is taxed also undermines businesses, making it much harder to attract employees, invest for future growth, and deliver innovative solutions that benefit our public and private clients. When midsize and small companies falter, it affects entire communities.

We are proud to join the American Council of Engineering Companies in spotlighting this issue as it gains traction in Washington. Members of Congress in both parties have proposed bills in the House and Senate to overturn this tax change. We at MS Consultants extend our appreciation to Sen. J.D. Vance for cosponsoring this bill along with eight Ohio representatives.

We need other lawmakers to follow their lead. We need a fix now. This will allow firms like ours to continue growing and providing R&D that supports the future needs of Ohio’s communities.

Thomas P. Mosure is chief growth officer and Monica Mosure is chief administrative officer of MS Consultants, Inc.

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