Software firms across US facing tax bills that threaten startup survival

Re:Software firms across US facing tax bills that threaten s... by Kon-Peki on Tuesday April 18, 2023 @11:28AM (#35615298)

Is there a legal definition of "development" that needs to be used? In the dictionary, the definition that most fits "software development" is "The application of techniques or technology to the production of new goods or services."

Which means that at the very least, companies should be able to classify at least some portion of salary costs as "not software development". Maintenance, bug fixing, useless meetings, etc?

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Re:Software firms across US facing tax bills that threaten s... by agwa on Tuesday April 18, 2023 @11:36AM (#35615416)

As far as I can tell, the law does not define it, and the IRS has provided no guidance.

It would certainly be consistent with the spirit of R&E to not classify maintenance and bug fixes as R&E, and it would definitely reduce the sting of this change for established companies. Startups would still be pretty screwed.

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Re:Software firms across US facing tax bills that threaten s... by alkonaut on Wednesday April 19, 2023 @04:11AM (#35625657)

Even during greenfield, you probably fix 5 bugs for every feature. It's just that the bugs you fix were ones you created yesterday and not something a customer reported in the version you shipped a year ago. Writing tax law that even makes people need to think about what is a bug and what isn't is insane. What was wrong with making it simple like (I assume) most countries where you just treat all salaries as expenses that are completely deducted? What would be lost?

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