Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. LET'S SEE WHERE THIS GOES: Starting this year, companies have to write off their research expenses over at least five years — a change that Republicans made in their 2017 tax law (though many of them never really wanted to follow through on it.) Supporters of allowing those costs to be deducted immediately note that would just be returning to a policy that was in place in the U.S. for decades before this January — and that forcing those expenses to be written off over at least five years puts American companies at a disadvantage against competitors from other countries with more generous R&D policies. Chances are that Congress will bring back immediate expensing for research at some point in the near future. But business advocates and key supporters on the Hill — who include some Democrats in potentially tough races this fall — want that to happen on the soonest possible vehicle, and that could easily be this bipartisan China competition legislation currently being hammered out. All of which is a long way of saying — keep an eye on the opposition from progressives and key Democrats to attaching the research provision to that broader competitions bill. Those skeptics have noted, among other things, that it's off-key for Democrats to spend tens of billions on corporate tax cuts when they can't keep the expanded Child Tax Credit on the books for more than a year. In the end, that means it might be easier for Democrats to pass immediate expensing for research costs as part of legislation that includes lots more in the way of corporate tax increases – like some sort of offshoot of the now-stalled Build Back Better plan. (In fact, ITEP and other progressive groups have explicitly said as much.) Of course, that assumes that Democrats can actually get their act together and pass a bill to raise taxes, and essentially do whatever else can get the OK from Sen. Joe Manchin (D-W.Va.). And there's definitely reason to think that Democrats might fall short — including that Democratic leaders might be approaching the situation too passively, as NBC News' Sahil Kapur and Benjy Sarlin wrote, by waiting on Manchin to more explicitly write down what he wants to do to raise taxes, battle inflation and reduce deficits. STATE FLY-AROUND: Texas and Florida are the two biggest states run by Republicans. But those two places have been comparative supportive players during all the talk of tax-cutting in the states — which to be clear, there has been a lot of in recent months, with more below and to come. And to be fair, both Florida and Texas already don't have income taxes. But both states also got a little further into the tax-cutting spirit in recent days. In Texas, voters overwhelmingly backed a pair of amendments to the state constitution that will lead to residents getting marginally lower property tax bills, as the Austin American-Statesman reported. And by overwhelmingly, we mean both amendments passed with around 85 percent. One would raise an exemption for school property district taxes, and the other would extend existing property tax relief to homeowners who are disabled or at least 65 years old. Hundreds of miles to the east, Gov. Ron DeSantis of Florida signed some $1.2 billion worth of tax cuts into law on Friday, the Tallahassee Democrat reports. Lots of those tax cuts are more targeted, including four sales tax holidays and scrapping the sales tax for diapers for a year. The biggest chunk of tax relief won't come until the fall, either — a pause on the state's gas tax that will be in effect for October, when less tourists are heading to Florida and the month before DeSantis seeks a second term as governor. (Also, not for nothing; Federal relief funds will be helping cover the cost for the gas tax holiday.)
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