American Innovation and R&D Competitiveness Act of 2025

The American Innovation and R&D Competitiveness Act of 2025 (HR1990) was introduced in the House on March 10, 2025, and subsequently referred to the House Committee on Ways and Means on the same day. This bill seeks to amend Section 174 of the Internal Revenue Code of 1986 to restore the immediate deduction for research and experimental expenditures. Currently, R&D costs must be amortized over five years, which increases the immediate tax burden on companies investing in innovation. This bill does not involve direct funding or appropriations but rather provides a tax benefit. By allowing immediate expensing of R&D costs, companies would see a reduction in their taxable income in the year the expenses are incurred, leading to improved cash flow. This mechanism directly benefits companies that invest heavily in research and development, as it lowers their effective tax rate and frees up capital that can be reinvested into further R&D or other business operations. The bill has significant bipartisan support with 81 cosponsors, including members from both Republican and Democratic parties, which suggests potential for advancement. Structural winners under this legislation would be companies across the Technology, Manufacturing, and Healthcare sectors that incur substantial R&D expenses. Examples include major technology firms like Microsoft ($MSFT), Alphabet ($GOOGL), Amazon ($AMZN), and NVIDIA ($NVDA), as well as pharmaceutical and healthcare companies such as Johnson & Johnson ($JNJ), Pfizer ($PFE), Merck & Co. ($MRK), and Eli Lilly and Company ($LLY). These companies would experience an immediate financial benefit from the restoration of R&D expensing. UnitedHealth Group ($UNH) would be less directly impacted as its R&D expenditures are generally lower relative to its overall business model compared to pharmaceutical or technology innovators. Looking at recent market data, several R&D-intensive companies have shown varied performance. Microsoft ($MSFT) is currently at $372.88, down 9.2% over 30 days but up 3.88% over 7 days. Alphabet ($GOOGL) is at $299.99, down 0.3% over 30 days but up 9.69% over 7 days. Amazon ($AMZN) is at $212.79, down 2.81% over 30 days but up 5.89% over 7 days. NVIDIA ($NVDA) is at $177.64, down 3.11% over 30 days but up 7.55% over 7 days. In healthcare, Johnson & Johnson ($JNJ) is at $240.97, up 0.56% over 30 days but down 0.63% over 7 days. Pfizer ($PFE) is at $27.83, up 4.58% over 30 days and 0.22% over 7 days. Merck & Co. ($MRK) is at $120.85, up 4.12% over 30 days and 2.33% over 7 days. Eli Lilly and Company ($LLY) is at $927.06, down 5.72% over 30 days but up 4.56% over 7 days. These recent movements do not directly reflect the bill's progress, as it is still in early stages, but they provide a baseline for companies that would benefit if the bill were to pass. As of April 7, 2026, the bill is in the early stages of the legislative process, having only been referred to the House Committee on Ways and Means. The next steps would involve committee hearings, potential markups, and a vote in the committee before it could be considered by the full House. Given the presence of related bills (HR3967, S2056, S1639) also addressing R&D expensing, there is a clear legislative interest in this policy, indicating a potential path forward, though the timeline remains uncertain.