Credits for research activities conducted in this state — carryforward

Official textlegislature.idaho.govlast amended 202616 subsections

(1)(a) Subject to the limitations of this section, there shall be allowed to a taxpayer a nonrefundable credit against taxes imposed by sections 63-3024, 63-3025, and 63-3025A, Idaho Code, for increasing research activities in Idaho.

(b) The credit allowed by paragraph (a) of this subsection shall be the sum of:

(i) Five percent (5%) of the excess of qualified research expenses for research conducted in Idaho over the base amount; and

(ii) Five percent (5%) basic research payments allowable under section 41(e) of the Internal Revenue Code for basic research conducted in Idaho.

(c) The credit allowed by paragraph (a) of this subsection shall be computed without regard to the calculation of the alternative incremental credit provided for in section 41(c)(4) of the Internal Revenue Code or the alternative simplified credit provided for in section 41(c)(5) of the Internal Revenue Code.

(2) As used in this section:

(a) The terms "qualified research expenses," "qualified research," "basic research payments" and "basic research" shall be as defined in section 41 of the Internal Revenue Code, except that the research must be conducted in Idaho.

(b) The term "base amount" shall mean an amount calculated as provided in section 41(c) and (h) of the Internal Revenue Code, except that:

(i) A taxpayer’s gross receipts include only those gross receipts attributable to sources within this state as provided in subsections (12) and (13) of section 63-3027, Idaho Code; and

(ii) Notwithstanding section 41(c) of the Internal Revenue Code, for purposes of calculating the base amount, a taxpayer:

(A) May elect to be treated as a start-up company as provided in section 41(c)(3)(B) of the Internal Revenue Code, regardless of whether the taxpayer meets the requirements of section 41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and

(B) May not revoke an election to be treated as a start-up company.

(3) The credit allowed by subsection (1)(a) of this section together with any credits carried forward under subsection (5) of this section shall not exceed the amount of tax due under sections 63-3024, 63-3025, and 63-3025A, Idaho Code, after allowance for all other credits permitted by this chapter. When credits earned in more than one (1) taxable year are available, the oldest credits shall be applied first.

(4) In the case of a group of corporations filing a combined report under section 63-3027(22), Idaho Code, credit earned by one (1) member of the group but not used by that member may be used by another member of the group. For a combined group of corporations, any member of the group may claim credit carried forward unless the member who earned the credit is no longer included in the combined group.

(5) The credit allowed by subsection (1)(a) of this section shall be claimed for the taxable year during which the taxpayer qualifies for the credit. If the credit exceeds the limitation under subsection (3) of this section, the excess amount may be carried forward for a period that does not exceed the next fourteen (14) taxable years. Any amounts deducted or amortized by a taxpayer pursuant to section 174 or 174A of the Internal Revenue Code that constitute qualified research expenses, qualified research, basic research payments, or basic research, as those terms are defined in subsection (2) of this section, shall not be eligible for the credit provided in this section.

(6) In addition to other needed rules, the state tax commission may promulgate rules prescribing, in the case of S corporations, partnerships, trusts, or estates, a method of attributing the credit under this section to the shareholders, partners, or beneficiaries in proportion to their share of the income from the S corporation, partnership, trust, or estate.

Amendment history

63-3029G, added 2001, ch. 386, sec. 6, p. 1355; am. 2002, ch. 35, sec. 1, p. 67; am. 2004, ch. 345, sec. 1, p. 1025; am. 2010, ch. 44, sec. 2, p. 80; am. 2022, ch. 52, sec. 3, p. 168; am. 2026, ch. 1, sec. 3, p. 5.

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