H.R. 6756, the American Innovation Act of 2018, would amend the Internal Revenue Code by modifying the deduction for start-up and organizational expenditures and the treatment of losses, carryforwards and unused pre-change tax credits for companies after an ownership change. The bill raises the amount which may be deducted for start-up and organizational expenditures. In addition, it removes some limitations on the use of losses, carryforwards, and unused pre-change tax credits for new loss corporations that have experienced an ownership change.
The staff of the Joint Committee on Taxation (JCT) estimates that enacting the bill would reduce revenues by $5,416 million over the 2019-2028 period. Pay-as-you-go procedures apply because enacting the legislation would affect revenues.
JCT estimates that enacting the legislation would increase on-budget deficits by more than $5 billion in at least one of the four consecutive 10-year periods beginning in 2029. CBO and JCT estimate that enacting the bill would not increase net direct spending in any of the four consecutive 10-year periods beginning in 2029.
JCT has determined that the tax provisions of the bill contain no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act.