§ 44-32-3 - Credit for qualified research expenses.
SECTION 44-32-3
§ 44-32-3 Credit for qualified researchexpenses. – (a) A taxpayer shall be allowed a credit against the tax imposed by chapters11, 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 thousanddollars ($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 theexcess, if any, of:
(1) The qualified research expenses for the taxable year, over
(2) The base period research expenses.
(b) "Qualified research expenses" and "base period researchexpenses" 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 thissubsection, "qualified research expenses" also includes amounts expended forresearch by property and casualty insurance companies into methods and ways ofpreventing or reducing losses from fire and other perils.
(c) The credit allowed under this section for any taxableyear 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 ofcorporations, to less than the minimum fixed by § 44-11-2(e). If theamount of credit allowable under this section for any taxable year is less thanthe amount of credit available to the taxpayer any amount of credit notcredited in that taxable year may be carried over to the following year oryears, up to a maximum of seven (7) years, and may be credited against thetaxpayer's tax for that year or years. For purposes of chapter 30 of thistitle, if the credit allowed under this section for any taxable year exceedsthe taxpayer's tax for that year, the amount of credit not credited in thattaxable year may be carried over to the following year or years, up to amaximum of seven (7) years, and may be credited against the taxpayer's tax forthat year or years. For purposes of determining the order in which carry-oversare taken into consideration, the credit allowed by § 44-32-2 is takeninto account before the credit allowed under this section.
(d) The investment tax credit allowed by § 44-31-1 shallbe taken into account before the credit allowed under this section.
(e) The credit allowed under this section shall only beallowed against the tax of that corporation included in a consolidated returnthat qualifies for the credit and not against the tax of other corporationsthat may join in the filing of a consolidated return.
(f) In the event the taxpayer is a partnership, joint ventureor small business corporation, the credit is divided in the same manner asincome.