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A bill to be entitled

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An act relating to a tax credit for research and

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development expenses; creating s. 220.194, F.S.; providing

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legislative intent regarding a state research and

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development tax credit; defining the terms "base amount"

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and "business enterprise"; providing a tax credit for

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businesses having qualified research expenses; providing

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the amount of the tax credit; providing that the credit

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taken in any one taxable year may not exceed a certain

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amount; providing that any unused credit may be carried

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forward for up to 10 years; providing that any unused

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credit may be assigned or sold to another taxpayer under

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certain conditions; providing for a maximum credit amount;

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requiring the Department of Revenue to adopt rules and

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guidelines; providing an effective date.

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Be It Enacted by the Legislature of the State of Florida:

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     Section 1.  Section 220.194, Florida Statutes, is created to

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read:

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     220.194 Research and development tax credit.--

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     (1) INTENT.--

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     (a) The Legislature finds that research and development has

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become an underlying source of wealth in the 21st century by

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generating ideas and technologies that encourage productivity and

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economic growth. Furthermore, private enterprise generates the

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main body of growth-stimulating innovations by making current

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ideas and technologies more market-sensitive than other sources

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of research and development.

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     (b) The Legislature finds that research and development tax

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credits can provide incentives for corporate research and

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development beyond expected levels. Research shows that the

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federal research and development tax credit is an effective tool

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for stimulating additional research and development, which in

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turn leads to faster economic growth. Further, typical state

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research and development tax credit programs have been shown to

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increase general, company-funded research and development within

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a state, often enhancing the state's competitiveness by enabling

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it to draw research and development activity away from other

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states.

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     (c) The Legislature finds that this state lags behind the

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nation in important corporate research and development. Currently

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more than half of the states have a research and development tax

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credit program. Adopting a state research and development tax

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credit program will help increase this state's economic

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competitiveness.

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     (d) The Legislature therefore adopts a research and

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development tax credit to encourage corporate research and

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development activity within this state, improve the state's

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competitive edge by offering support and benefits consistent with

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those provided by its regional and national economic competitors,

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support the state's vibrant innovation economy, and attract high-

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wage, professional research jobs to the state.

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     (2) DEFINITIONS.--As used in this section, the term:

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     (a) "Base amount" means the amount resulting from the

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following calculations:

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     1. The division of a business enterprise's research and

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development expenditures by its gross receipts for a

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predetermined base period.

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     2. The multiplication of the ratio resulting from the

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enterprise's research and development expenses over the 4-year

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period before the current tax year.

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     (b) "Business enterprise" means any business or the

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headquarters of any business that is engaged in the

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manufacturing, warehousing and distribution, processing,

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telecommunications, tourism, or research and development

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industries. The term does not exclude retail businesses.

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     (3) TAX CREDIT.--A research and development tax credit is

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allowed for a business enterprise that has qualified research

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expenses in this state in a taxable year exceeding the base

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amount, if the business enterprise for the same taxable year

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claims and is allowed a research credit under s. 41 of the

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Internal Revenue Code.

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     (a) The tax credit is 10 percent of the excess over the

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base amount.

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     (b) The credit taken in any one tax year may not exceed 50

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percent of the business enterprise's remaining net income tax

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liability under this chapter after all other credits have been

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applied.

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     (c) Any unused credit claimed may be carried forward for up

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to 10 years following the close of the taxable year in which the

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qualified research expenses are incurred.

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     (d) Any unused credit claimed may be assigned or sold to

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another taxpayer in this state if a claim for the allowance has

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not been filed within 1 year following the date the department

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approved the credit. The purchaser or assignee must use the tax

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credit in the taxable year in which the purchase or assignment of

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the credit is made. The purchased or assigned credit may not be

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used to offset more than 75 percent of the tax liability for a

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taxable year and may not be carried over, carried back, resold,

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or refunded.

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     (e) The maximum credit amount that may be approved during

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any calendar year is $ __ million.

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     (4) RULES.--The department shall adopt rules governing the

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manner and form of applications for the research and development

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tax credit and may establish guidelines for making an affirmative

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showing of qualification for the credit under this section.

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     Section 2.  This act shall take effect July 1, 2008.