Senate Bill sb2918
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Florida Senate - 2007 SB 2918
By Senator Diaz de la Portilla
36-1788-07
1 A bill to be entitled
2 An act relating to a tax credit for research
3 and development expenses; creating s. 220.194,
4 F.S.; providing legislative intent regarding a
5 state research and development tax credit;
6 defining the terms "base amount," "business
7 enterprise," and "qualified research expenses";
8 providing a tax credit for businesses having
9 qualified research expenses; providing that the
10 tax credit is 10 percent of the excess over the
11 base amount; providing that the credit taken in
12 any one taxable year may not exceed a certain
13 amount; providing that any unused credit may be
14 carried forward for up to 10 years following
15 the close of the tax year in which the
16 qualified expenses were incurred; providing
17 that any unused credit may be assigned or sold
18 to another taxpayer under certain conditions;
19 providing for a maximum credit amount;
20 requiring the Department of Revenue to adopt
21 rules and guidelines; providing an effective
22 date.
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24 Be It Enacted by the Legislature of the State of Florida:
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26 Section 1. Section 220.194, Florida Statutes, is
27 created to read:
28 220.194 Research and development tax credit.--
29 (1)(a) The Legislature finds that research and
30 development has become the underlying source of wealth in the
31 21st century by generating ideas and technologies that
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Florida Senate - 2007 SB 2918
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1 encourage productivity and economic growth. Furthermore,
2 companies generate the main body of growth-stimulating
3 innovations, making current ideas and technologies more
4 market-sensitive than other sources of research and
5 development.
6 (b) The Legislature further finds that research and
7 development tax credits are proven to provide incentives for
8 corporate research and development beyond expected levels.
9 Research shows that, not only is the federal research and
10 development tax credit an effective tool for stimulating
11 additional research and development, which in turn leads to
12 faster economic growth, but that state research and
13 development tax credit programs are nearly as important to
14 corporate research and development as the federal research and
15 development tax credit program, and that the typical state
16 research and development tax credit program has been shown to
17 increase general, company-funded research and development
18 within a state, often enhancing the state's competitiveness by
19 enabling it to draw research and development activity away
20 from other states.
21 (c) Additionally, the Legislature finds that this
22 state needs a state research and development tax credit
23 program to ensure economic competition. Unlike Florida, more
24 than half of the states have a research and development tax
25 credit program. Without a state research and development tax
26 credit, Florida lags behind the nation in important corporate
27 research and development.
28 (d) The Legislature therefore creates the research and
29 development tax credit to encourage corporate research and
30 development activity within the state, sharpen the state's
31 competitive edge by leveling the playing field with the
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Florida Senate - 2007 SB 2918
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1 state's regional and national economic competitors, support
2 the state's vibrant innovation economy, and attract high-wage,
3 professional research jobs to the state.
4 (2) As used in this section, the term:
5 (a) "Base amount" means the amount resulting from the
6 following calculations:
7 1. The division of a business enterprise's research
8 and development expenditures by its gross receipts for a
9 predetermined base period.
10 2. The multiplication of the ratio resulting from the
11 calculation in subparagraph 1. by the average of the business
12 enterprise's research and development expenses over the 4-year
13 period before the current tax year.
14 (b) "Business enterprise" means any business or the
15 headquarters of any business that is engaged in the
16 manufacturing, warehousing and distribution, processing,
17 telecommunications, tourism, or research and development
18 industries. The term does not exclude retail businesses.
19 (3) A tax credit is allowed for a business enterprise
20 that has qualified research expenses in this state in a
21 taxable year exceeding the base amount, if the business
22 enterprise for the same taxable year claims and is allowed a
23 research credit under s. 41 of the Internal Revenue Code of
24 1986, as amended.
25 (4) The tax credit provided in subsection (3) shall be
26 10 percent of the excess over the base amount.
27 (5) The credit taken in any one tax year may not
28 exceed 50 percent of the business enterprise's remaining net
29 income tax liability under this chapter after all other
30 credits have been applied.
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Florida Senate - 2007 SB 2918
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1 (6) Any unused credit claimed under this section may
2 be carried forward for up to 10 years following the close of
3 the taxable year in which the qualified research expenses were
4 incurred.
5 (7) Any unused credit claimed under this section may
6 be assigned or sold to another taxpayer in the state if there
7 has been no claim for allowance filed within 1 year following
8 the date that the Department of Revenue approved the credit.
9 The purchaser or assignee must use the newly obtained research
10 and development tax credit in the taxable year in which the
11 purchase or assignment of the credit is made. The purchased or
12 assigned research and development credit may not be used to
13 offset more than 75 percent of a tax liability for a taxable
14 year. The purchased or assigned credit may not be carried
15 over, carried back, resold, or refunded.
16 (8) The maximum credit amount that may be approved
17 during any calendar year is $ million.
18 (9) The Department of Revenue shall adopt rules
19 governing the manner and form of applications for credit and
20 may establish guidelines concerning the requisites for an
21 affirmative showing of qualification for the credit under this
22 section.
23 Section 2. This act shall take effect July 1, 2007.
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Florida Senate - 2007 SB 2918
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2 SENATE SUMMARY
3 Provides legislative intent regarding a state research
and development tax credit. Defines "base amount,"
4 "business enterprise," and "qualified research expenses."
Allows businesses with qualified research expenses to
5 have a tax credit. Provides that the tax credit is 10
percent of the excess over the base amount. Provides that
6 the credit taken in any one taxable year may not exceed a
certain amount. Provides that any unused credit may be
7 carried forward for up to 10 years after the close of the
tax year in which the qualified expenses were incurred.
8 Provides that any unused credit may be assigned or sold
to another taxpayer under certain conditions. Provides
9 for a maximum credit amount. Requires the Department of
Revenue to adopt rules and guidelines.
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