From Fortune Media Group:

A provision in the tax code threatens early-stage research firms. The 2017 Tax Cuts and Jobs Act changed Section 174, no longer allowing businesses to deduct the full cost of their R&D expenses in a single year. Small startups like Cellf BIO, which relies heavily on federal grant money, are a particularly at risk.

Cellf BIO’s business model is disrupted by the change. They have reliant on government grant money, and have no revenue yet. Thus, they now face a heavy tax burden and are forced to find investors. Other startups won’t have have the same opportunities.

Lawmakers are aware of the difficult position small research firms have been put in. House and Senate negotiators are announcing a deal could bring back full research expense deductions and are expected to act soon.



Read more: The federal government is simultaneously investing in my startup–and crippling our business with a little-known tax code provision. Only Congress can save us