Baldwin proposes R&D tax credit reform
U.S. Sen. Tammy Baldwin hit the mark — figuratively and literally — during a tour of FeraDyne Outdoors.
During a tour of the archery accessory manufacturer's Poplar Avenue facility, the Wisconsin Democrat got a chance to test the company's products — arrows, scopes and targets. After a quick lesson on how to fire a crossbow — the senator's first archery experience — the arrow flew, striking the center circle of the target.
Baldwin stopped at FeraDyne Outdoors on Wednesday to talk to company officials about a tax reform proposal she recently introduced that would make it easier for small manufacturers to take advantage of research and development tax credits available for innovation.
The 21st Century Manufacturing Act is a tax reform designed to revise the research and development tax credit to make them less onerous for small manufacturers, encourage investment in next-generation manufacturing technology, increase the credit from 14 to 20 percent, allow firms to use cost reduction and creating new uses for products to count as qualified research expenditures, count managers of research products as qualified expenditures and allow companies to deduct ten percent from expenditures on connected manufacturing equipment.
"Often times the R&D tax credit is not used," Baldwin said. "It's really narrowly defined, the white lab coats and laboratory, and not enough manufacturing."
However, she said, often times, it is manufacturers that come up with the innovations that create new products that also create jobs.
"This expansion makes it more generous; it will give people more incentive to apply for it," Baldwin said. "And it simplifies the process."
Baldwin said she decided to visit FeraDyne because they are a major employer in Superior.
The research and development department is an important part of FeraDyne's business, and will allow the company that employs about 300 people to launch 75 new products this year, according to Craig Tinsley, FeraDyne's vice president of operations.
The company, which acquired Field Logic in 2015, makes products under many brands including Rage, Block Targets, GlenDel, Muzzy, Trufire, IQ Bowsight, Hurricane, Sure-Loc precision sites — credited with five Olympic gold medals in archery — and the recently acquired Eastman Outdoors in Flushing, Mich., which offers products also under the brands Carbon Express and Gorilla Gear.
Despite Feradyne's innovation, Chief Financial Officer Mike Janousek said the company made the decision not to apply for R&D tax credits because the documentation, time and tax accounting needed to take advantage of the credits was cost-prohibitive.
"If they loosen up the requirements, we will definitely take advantage of it," Janousek said. The changes proposed would also allow the company to get credit for the expense of modifying equipment, which would be beneficial to the company as well, he said.
"Our big thing is to try to be American made, U.S. jobs and grow as much as we can," Janousek said. "If we can get some tax legislation that will help us continue on with that, I think that will be beneficial for us. It's not only good for the country — it's good for the local and it's good for our employees overall."
Baldwin said she is hopeful her legislation will be among the tax policies Congress considers as it takes up tax reform after legislators head back to Washington, D.C., next week. After all, she said, many of the innovations made in the world and in Wisconsin are made by manufacturers.
"We are a state that makes things," said Baldwin, a proponent for "Made in Wisconsin."