Tax credit for research and experimental expenditures

# (a)

There shall be allowed as a credit against the tax imposed on any corporation under this chapter, with respect to income years of such corporation commencing on or after January 1, 1994, an amount equal to twenty per cent of the amount spent by such corporation directly on research and experimental expenditures, as defined in Section 174 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, which are conducted in this state and which exceeds the amount spent by such corporation during the preceding income year of such corporation for such expenditures.

# (b)

# (1)

With respect to any income year commencing on or after January 1, 2000, a credit or any portion of a credit that is allowed under this section but that is not used by a taxpayer because the amount of the credit exceeds the tax due and owing by the taxpayer shall be carried forward to each of the successive income years until such credit, or applicable portion of the credit, is fully taken. In no case shall a credit, or any portion of a credit, that is not used by a taxpayer be carried forward for a period of more than fifteen years.

# (2)

(A) With respect to any income year commencing on or after January 1, 1997, and prior to January 1, 2000, a credit or any portion of a credit that is allowed under this section but that is not used by a biotechnology company because the amount of the credit exceeds the tax due and owing by the taxpayer shall be carried forward to each of the successive income years until such credit, or applicable portion of the credit, is fully taken. In no case shall a credit, or any portion of a credit, that is not used by a biotechnology company be carried forward for a period of more than fifteen years. (B) For purposes of this subsection, “biotechnology company” means a company engaged in the business of applying technologies, such as recombinant DNA techniques, biochemistry, molecular and cellular biology, genetics and genetic engineering, biological cell fusion techniques, and new bioprocesses, using living organisms, or parts of organisms, to produce or modify products, to improve plants or animals, to develop microorganisms for specific uses, to identify targets for small molecule pharmaceutical development, or to transform biological systems into useful processes and products. (P.A. 92-193, S. 3, 8; P.A. 93-403, S. 1, 3; P.A. 96-252, S. 7, 8; P.A. 98-110, S. 22, 27; P.A. 03-225, S. 2.) History: P.A. 92-193 effective July 1, 1992, and applicable to taxable years of corporations commencing on or after January 1, 1993 (Revisor's note: In codifying public act 92-193 the words “an amount” were inserted editorially by the Revisors in Subdiv. (1) after the words “January 1, 1994,” for consistency with Subdiv. (2)); P.A. 93-403 added requirement that research and experimental expenditures be conducted in the state, effective June 29, 1993, and applicable to taxable years commencing on and after January 1, 1993; P.A. 96-252 authorized tax credits which are not used by biotechnology companies to be carried forward and defined “biotechnology company”, effective July 1, 1996, and applicable to income years of corporations commencing on or after January 1, 1997; P.A. 98-110 expanded credit to all taxpayers, effective May 19, 1998, and applicable to income years commencing on or after January 1, 2000; P.A. 03-225 divided existing provisions into Subsecs. (a) and (b), amended Subsec. (a) to delete obsolete references and make technical changes, and amended Subsec. (b) to add provisions re credit for biotechnology companies after January 1, 1997, and make technical changes, effective July 9, 2003. (Return to ChapterTable of Contents) (Return toList of Chapters) (Return toList of Titles)