TITLE 44
Taxation

CHAPTER 44-32
Elective Deduction for Research and Development Facilities

SECTION 44-32-3


§ 44-32-3. Credit for qualified research expenses.

(a) A taxpayer shall be allowed a credit against the tax imposed by chapters 11, 17 or 30 of this title. The amount of the credit shall be five percent (5%)(and in the case of amounts paid or accrued after January 1, 1998, twenty-two and one-half percent (22.5%) for the first twenty-five thousand dollars ($25,000) worth of credit and sixteen and nine-tenths percent (16.9%) for the amount of credit above twenty-five thousand dollars ($25,000)) of the excess, if any, of:

(1) The qualified research expenses for the taxable year, over

(2) The base period research expenses.

(b)(1) "Qualified research expenses" and "base period research expenses" have the same meaning as defined in 26 U.S.C. § 41; provided, that the expenses have been incurred in this state after July 1, 1994.

(2) Notwithstanding the provisions of subdivision (1) of this subsection, "qualified research expenses" also includes amounts expended for research by property and casualty insurance companies into methods and ways of preventing or reducing losses from fire and other perils.

(c) The credit allowed under this section for any taxable year shall not reduce the tax due for that year by more than fifty percent (50%) of the tax liability that would be payable, and in the case of corporations, to less than the minimum fixed by § 44-11-2(e). If the amount of credit allowable under this section for any taxable year is less than the amount of credit available to the taxpayer any amount of credit not credited in that taxable year may be carried over to the following year or years, up to a maximum of seven (7) years, and may be credited against the taxpayer's tax for that year or years. For purposes of chapter 30 of this title, if the credit allowed under this section for any taxable year exceeds the taxpayer's tax for that year, the amount of credit not credited in that taxable year may be carried over to the following year or years, up to a maximum of seven (7) years, and may be credited against the taxpayer's tax for that year or years. For purposes of determining the order in which carry-overs are taken into consideration, the credit allowed by § 44-32-2 is taken into account before the credit allowed under this section.

(d) The investment tax credit allowed by § 44-31-1 shall be taken into account before the credit allowed under this section.

(e) The credit allowed under this section shall only be allowed against the tax of that corporation included in a consolidated return that qualifies for the credit and not against the tax of other corporations that may join in the filing of a consolidated return.

(f) In the event the taxpayer is a partnership, joint venture or small business corporation, the credit is divided in the same manner as income.

History of Section.
(P.L. 1994, ch. 147, § 2; P.L. 1997, ch. 30, art. 15, § 1; P.L. 1997, ch. 58, § 1; P.L. 1999, ch. 221, § 2.)