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The Florida Senate

2015 Florida Statutes

Title XIV TAXATION AND FINANCE
Chapter 220 INCOME TAX CODE Entire Chapter
SECTION 196
Research and development tax credit.
F.S. 220.196
1220.196 Research and development tax credit.—
(1) DEFINITIONS.—As used in this section, the term:
(a) “Base amount” means the average of the business enterprise’s qualified research expenses in this state allowed under 26 U.S.C. s. 41 for the 4 taxable years preceding the taxable year for which the credit is determined. The qualified research expenses taken into account in computing the base amount shall be determined on a basis consistent with the determination of qualified research expenses for the taxable year.
(b) “Business enterprise” means any corporation as defined in s. 220.03 which meets the definition of a target industry business as defined in s. 288.106.
(c) “Qualified research expenses” means research expenses qualifying for the credit under 26 U.S.C. s. 41 for in-house research expenses incurred in this state or contract research expenses incurred in this state. The term does not include research conducted outside this state or research expenses that do not qualify for a credit under 26 U.S.C. s. 41.
(2) TAX CREDIT.—
(a) As provided in this section, a business enterprise is eligible for a credit against the tax imposed by this chapter if it:
1. Has qualified research expenses in this state in the taxable year exceeding the base amount;
2. Claims and is allowed a research credit for such qualified research expenses under 26 U.S.C. s. 41 for the same taxable year as subparagraph 1.; and
3. Is a qualified target industry business as defined in s. 288.106(2)(n). Only qualified target industry businesses in the manufacturing, life sciences, information technology, aviation and aerospace, homeland security and defense, cloud information technology, marine sciences, materials science, and nanotechnology industries may qualify for a tax credit under this section. A business applying for a credit pursuant to this section shall include a letter from the Department of Economic Opportunity certifying whether the business meets the requirements of this subparagraph with its application for credit. The Department of Economic Opportunity shall provide such a letter upon receiving a request.
(b) The tax credit shall be 10 percent of the excess qualified research expenses over the base amount. However, the maximum tax credit for a business enterprise that has not been in existence for at least 4 taxable years immediately preceding the taxable year is reduced by 25 percent for each taxable year for which the business enterprise, or a predecessor corporation that was a business enterprise, did not exist.
(c) The credit taken in any taxable year may not exceed 50 percent of the business enterprise’s remaining net income tax liability under this chapter after all other credits have been applied under s. 220.02(8).
(d) Any unused credit authorized under this section may be carried forward and claimed by the taxpayer for up to 5 years.
(e) The combined total amount of tax credits which may be granted to all business enterprises under this section during any calendar year is $9 million, except that the total amount that may be awarded in the 2016 calendar year is $23 million. Applications may be filed with the department on or after March 20 and before March 27 for qualified research expenses incurred within the preceding calendar year. If the total credits for all applicants exceed the maximum amount allowed under this paragraph, the credits shall be allocated on a prorated basis.
(3) RECALCULATION OF CREDIT AMOUNT.—If the amount of qualified research expenses is reduced as a result of a federal audit or examination, the credit granted pursuant to this section must be recalculated. The taxpayer must file amended returns for all affected years pursuant to s. 220.23(2), and the taxpayer must pay to the department the difference between the initial credit amount taken and the recalculated credit amount with interest.
(4) RULES.—The department may adopt rules to administer this section, including, but not limited to, rules prescribing forms and application procedures and dates, and may establish guidelines for making an affirmative showing of qualification for a credit and any evidence needed to substantiate a claim for credit under this section.
History.—s. 17, ch. 2011-76; s. 21, ch. 2015-221.
1Note.—Section 35, ch. 2011-76, provides that:

“(1) The executive director of the Department of Revenue is authorized, and all conditions are deemed met, to adopt emergency rules under ss. 120.536(1) and 120.54(4), Florida Statutes, for the purpose of implementing this act.

“(2) Notwithstanding any other provision of law, such emergency rules shall remain in effect for 6 months after the date adopted and may be renewed during the pendency of procedures to adopt permanent rules addressing the subject of the emergency rules.”