HB 733

1	A bill to be entitled
2	An act relating to a tax credit for research and
3	development expenses; creating s. 220.194, F.S.; providing
4	legislative intent regarding a state research and
5	development tax credit; defining the terms "base amount,"
6	"business enterprise," and "qualified research expenses";
7	providing a tax credit for businesses having qualified
8	research expenses; providing that the tax credit is 10
9	percent of the excess over the base amount; providing that
10	the credit taken in any one taxable year may not exceed a
11	certain amount; providing that any unused credit may be
12	carried forward for up to 10 years following the close of
13	the tax year in which the qualified expenses were
14	incurred; providing that any unused credit may be assigned
15	or sold to another taxpayer under certain conditions;
16	providing for a maximum credit amount; requiring the
17	Department of Revenue to adopt rules and guidelines;
18	providing an effective date.
19
20	Be It Enacted by the Legislature of the State of Florida:
21
22	Section 1.  Section 220.194, Florida Statutes, is created
23	to read:
24	220.194  Research and development tax credit.--
25	(1)(a)  The Legislature finds that research and development
26	has become the underlying source of wealth in the 21st century
27	by generating ideas and technologies that encourage productivity
28	and economic growth. Furthermore, companies generate the main
29	body of growth-stimulating innovations, making current ideas and
30	technologies more market-sensitive than other sources of
31	research and development.
32	(b)  The Legislature further finds that research and
33	development tax credits are proven to provide incentives for
34	corporate research and development beyond expected levels.
35	Research shows that, not only is the federal research and
36	development tax credit an effective tool for stimulating
37	additional research and development, which in turn leads to
38	faster economic growth, but that state research and development
39	tax credit programs are nearly as important to corporate
40	research and development as the federal research and development
41	tax credit program, and that the typical state research and
42	development tax credit program has been shown to increase
43	general, company-funded research and development within a state,
44	often enhancing the state's competitiveness by enabling it to
45	draw research and development activity away from other states.
46	(c)  Additionally, the Legislature finds that this state
47	needs a state research and development tax credit program to
48	ensure economic competition. Unlike Florida, more than half of
49	the states have a research and development tax credit program.
50	Without a state research and development tax credit program,
51	Florida lags behind the nation in important corporate research
52	and development.
53	(d)  The Legislature therefore creates the research and
54	development tax credit program to encourage corporate research
55	and development activity within the state, sharpen the state's
56	competitive edge by leveling the playing field with the state's
57	regional and national economic competitors, support the state's
58	vibrant innovation economy, and attract high-wage, professional
59	research jobs to the state.
60	(2)  As used in this section, the term:
61	(a)  "Base amount" means the amount resulting from the
62	following calculations:
63	1.  The division of a business enterprise's research and
64	development expenditures by its gross receipts for a
65	predetermined base period.
66	2.  The multiplication of the ratio resulting from the
67	calculation in subparagraph 1. by the average of the business
68	enterprise's research and development expenses over the 4-year
69	period before the current tax year.
70	(b)  "Business enterprise" means any business or the
71	headquarters of any business that is engaged in the
72	manufacturing, warehousing and distribution, processing,
73	telecommunications, tourism, or research and development
74	industries. The term does not exclude retail businesses.
75	(3)  A tax credit is allowed for a business enterprise that
76	has qualified research expenses in this state in a taxable year
77	exceeding the base amount, if the business enterprise for the
78	same taxable year claims and is allowed a research credit under
79	s. 41 of the Internal Revenue Code of 1986, as amended.
80	(4)  The tax credit provided in subsection (3) shall be 10
81	percent of the excess over the base amount.
82	(5)  The credit taken in any one tax year may not exceed 50
83	percent of the business enterprise's remaining net income tax
84	liability under this chapter after all other credits have been
85	applied.
86	(6)  Any unused credit claimed under this section may be
87	carried forward for up to 10 years following the close of the
88	taxable year in which the qualified research expenses were
89	incurred.
90	(7)  Any unused credit claimed under this section may be
91	assigned or sold to another taxpayer in the state if there has
92	been no claim for allowance filed within 1 year following the
93	date that the Department of Revenue approved the credit. The
94	purchaser or assignee must use the newly obtained research and
95	development tax credit in the taxable year in which the purchase
96	or assignment of the credit is made. The purchased or assigned
97	research and development credit may not be used to offset more
98	than 75 percent of a tax liability for a taxable year. The
99	purchased or assigned credit may not be carried over, carried
100	back, resold, or refunded.
101	(8)  The maximum credit amount that may be approved during
102	any calendar year is $15 million.
103	(9)  The Department of Revenue shall adopt rules governing
104	the manner and form of applications for credit and may establish
105	guidelines concerning the requisites for an affirmative showing
106	of qualification for the credit under this section.
107	Section 2.  This act shall take effect July 1, 2008.

CODING: Words stricken are deletions; words underlined are additions.