Can Lockheed Win Against the U.S.?
After the U.S. Government renewed the tax credit for research and design, some companies are looking to pounce, but some of them want money back from the past, and Lockheed Martin (NYSE:LMT) is just one of those willing to go to court against the U.S. to get that money.
In Lockheed’s case, the company is seeking to get $13.6 million in the research tax credits for projects dating back to 2004 through 2007. The two projects in question are a space rocket launcher and a New York surveillance system. However, the issue with the U.S. isn’t about when the tax credit claims were filed — the U.S. often allows retroactive claims. There is some debate over what counts as research and what doesn’t.
The government denied Lockheed the tax credit in May 2012 because some of Lockheed’s costs went into the design of prototypes, which the government appears to be claiming are not a part of research. On the other hand, Lockheed argues that the new and unproven designs should qualify as research.
Lockheed is not alone; other companies are also seeking retroactive tax credits for research and design. Dow Chemical Co. (NYSE:DOW) and Trinity Industries (NYSE:TRN) are two others in similar positions to Lockheed. Dow was also denied a credit to cover supply costs last year because the supplies went into finished goods that were eventually sold…