Advocating for Small Tech: Insights from Washington D.C. with ACT | The App Association

Last week, I had the privilege of joining fellow small technology business leaders in Washington D.C. with ACT | The App Association for a series of meetings with policymakers. Our goal was clear: to represent the interests and address the specific challenges faced by small businesses in the dynamic tech industry. It was an intensive few days, but incredibly rewarding to engage directly with those shaping the policies that impact our ability to innovate, grow, and create jobs.

Here are some of the key issues we championed:

Restoring the R&D Tax Credit to Fuel Innovation:

One of our top priorities was advocating for a critical change to Section 174 of the IRS code, commonly referred to as the R&D tax credit. Several years ago, the treatment of research and development expenses was altered, requiring companies to amortize these costs over five years instead of deducting them in the year they were incurred. For small businesses with limited cash flow, this change has been a significant burden, directly impacting our ability to invest in the innovation that drives our industry forward.

We strongly advocated for reverting to the previous treatment, allowing businesses to immediately expense their R&D costs. This would free up crucial capital, enabling us to hire more engineers, develop new products, and remain competitive in a global market. We were very encouraged to see that this critical change appears to be included in the tax bill that advanced in the House Ways and Means Committee just yesterday. This is a testament to the power of collective advocacy and a positive step for innovation across the country.

The Urgent Need for a Federal Privacy Standard:

In the absence of a comprehensive federal privacy law, states have increasingly enacted their own privacy regulations. While well-intentioned, this growing patchwork of disparate state laws creates a compliance nightmare for small technology companies. Each state can have different requirements for data collection, usage, storage, and consumer rights, forcing small businesses to navigate a complex and costly legal landscape.

For a small team, dedicating limited resources to understanding and complying with dozens of different state laws is a significant drain that distracts from core business activities like product development and serving customers. We emphasized to policymakers that a clear, consistent federal privacy standard is essential to protect consumers effectively while providing the regulatory certainty small businesses need to operate nationwide without undue burden.

The Detrimental Impact of Tariffs on Small Tech:

Tariffs, often implemented with broader economic goals in mind, can have unintended and harmful consequences for small technology businesses. Our companies often rely on global supply chains for hardware components, manufacturing, or distribution. Tariffs increase the costs of these essential goods and services, which can be difficult for small businesses with tight margins to absorb.

These increased costs can lead to higher prices for consumers, reduced investment in growth, and can make it harder for us to compete with larger companies that may have more diversified supply chains or the ability to negotiate better terms. We shared real-world examples of how tariff uncertainty and increased costs for the medical devices we integrate with is directly impacting our business and the ability of our customers to provide innovative care to their patients.

Promoting Industry-Specific, Risk-Based AI Regulation:

As artificial intelligence continues to evolve, the question of how to regulate it is a major topic in Washington. While we recognize the need for responsible AI development and deployment, we cautioned against broad, one-size-fits-all federal regulations. The AI landscape is incredibly diverse, with applications ranging from low-risk tools to those with potentially significant societal impacts.

We advocated for an approach to AI regulation that is industry-specific and risk-based. This means tailoring regulations to the specific context and potential risks of different AI applications, rather than imposing uniform rules that could stifle innovation in less risky areas or place unreasonable burdens on small businesses experimenting with AI. A flexible, risk-based framework would allow for continued innovation while addressing potential harms effectively.

The Value of Advocacy for Small Technology Businesses

Rimidi has been a member of ACT | The App Association for nearly a decade, and spending time in Washington D.C. to directly engage with policymakers is always an invaluable experience. It underscores the importance of organizations like ACT | The App Association in providing a platform for small businesses to pool their voices and advocate for policies that foster a favorable environment for innovation and growth.

We left Washington feeling optimistic about the potential for progress on issues like the R&D tax credit and hopeful that our perspectives on privacy, tariffs, and AI regulation will inform future legislative efforts. Continuing this dialogue is crucial to ensuring that the policies enacted in Washington support, rather than hinder, the vibrant small technology business community that is so vital to the American economy.