| 1 | A bill to be entitled |
| 2 | An act relating to research and development tax credits; |
| 3 | amending s. 220.02, F.S.; revising legislative intent to |
| 4 | include the research and development tax credit in the |
| 5 | ordered list according to which credits against corporate |
| 6 | income tax or franchise tax are applied; creating s. |
| 7 | 220.194, F.S.; providing definitions; providing a research |
| 8 | and development tax credit of a specified amount for |
| 9 | application by a business enterprise against the corporate |
| 10 | income tax or franchise tax under certain circumstances; |
| 11 | providing a limitation on the amount of research and |
| 12 | development tax credit that may be applied by a business |
| 13 | enterprise against tax liability in a taxable year; |
| 14 | authorizing carryforward of the tax credit for a specified |
| 15 | period; authorizing the sale or assignment of the credit |
| 16 | to another business enterprise under certain |
| 17 | circumstances; limiting the total amount of research and |
| 18 | development tax credit available annually to all business |
| 19 | enterprises; providing for the filing of applications for |
| 20 | granting and approval of the tax credit by the Department |
| 21 | of Revenue; providing for priority in granting the tax |
| 22 | credit; authorizing the department to adopt rules; |
| 23 | providing applicability; providing an effective date. |
| 24 |
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| 25 | Be It Enacted by the Legislature of the State of Florida: |
| 26 |
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| 27 | Section 1. Subsection (8) of section 220.02, Florida |
| 28 | Statutes, is amended to read: |
| 29 | 220.02 Legislative intent.- |
| 30 | (8) It is the intent of the Legislature that credits |
| 31 | against either the corporate income tax or the franchise tax be |
| 32 | applied in the following order: those enumerated in s. 631.828, |
| 33 | those enumerated in s. 220.191, those enumerated in s. 220.181, |
| 34 | those enumerated in s. 220.183, those enumerated in s. 220.182, |
| 35 | those enumerated in s. 220.1895, those enumerated in s. 221.02, |
| 36 | those enumerated in s. 220.184, those enumerated in s. 220.186, |
| 37 | those enumerated in s. 220.1845, those enumerated in s. 220.19, |
| 38 | those enumerated in s. 220.185, those enumerated in s. 220.1875, |
| 39 | those enumerated in s. 220.192, those enumerated in s. 220.193, |
| 40 | those enumerated in s. 288.9916, those enumerated in s. |
| 41 | 220.1899, and those enumerated in s. 220.1896, and those |
| 42 | enumerated in s. 220.194. |
| 43 | Section 2. Section 220.194, Florida Statutes, is created |
| 44 | to read: |
| 45 | 220.194 Research and development tax credit.- |
| 46 | (1) DEFINITIONS.-As used in this section, the term: |
| 47 | (a) "Base amount" means the average of the business |
| 48 | enterprise's qualified research expenses in this state allowed |
| 49 | under 26 U.S.C. s. 41 for the 4 taxable years preceding the |
| 50 | taxable year for which the credit is being determined. The |
| 51 | qualified research expenses taken into account in computing the |
| 52 | base amount shall be determined on a basis consistent with the |
| 53 | determination of qualified research expenses for the credit |
| 54 | year. |
| 55 | (b) "Base period" means the 4 taxable years preceding the |
| 56 | taxable year for which the credit is being determined. |
| 57 | (c) "Business enterprise" means any corporation as defined |
| 58 | in s. 220.03(1)(e) that is also a target industry business as |
| 59 | defined in s. 288.106(2)(t). |
| 60 | (d) "Qualified research expenses" means research expenses |
| 61 | qualifying for the credit under 26 U.S.C. s. 41 for in-house |
| 62 | research expenses incurred in this state or contract research |
| 63 | expenses incurred in this state. The term does not include |
| 64 | research conducted outside this state or research that is |
| 65 | excluded under 26 U.S.C. s. 41. |
| 66 | (2) TAX CREDIT.-Subject to the limitations contained in |
| 67 | paragraph (e), a business enterprise is eligible for a credit |
| 68 | against the tax imposed by this chapter if the business |
| 69 | enterprise has qualified research expenses in this state in the |
| 70 | calendar year exceeding the base amount and, for the same |
| 71 | calendar year, claims and is allowed a research credit for such |
| 72 | qualified research expenses under 26 U.S.C. s. 41. |
| 73 | (a) The tax credit shall be 10 percent of the excess |
| 74 | qualified research expenses over the base amount. However, the |
| 75 | maximum tax credit for a business enterprise that has not been |
| 76 | in existence for the entire base period is reduced by 25 percent |
| 77 | for each taxable year for which the business enterprise, or a |
| 78 | predecessor corporation that was a business enterprise, did not |
| 79 | exist during the base period. |
| 80 | (b) The credit taken in any single tax year may not exceed |
| 81 | 50 percent of the business enterprise's remaining net income tax |
| 82 | liability under this chapter after all other credits have been |
| 83 | applied under s. 220.02(8). |
| 84 | (c) Any unused credit authorized under this section may be |
| 85 | carried forward and claimed by the taxpayer for up to 5 years |
| 86 | after the close of the taxable year in which the qualified |
| 87 | research expenses are incurred. |
| 88 | (d) Any unused credit authorized under this section may be |
| 89 | assigned or sold to another business enterprise if a claim for |
| 90 | the allowance has not been filed within 1 calendar year after |
| 91 | the date on which the department approved the credit. The |
| 92 | business enterprise selling the tax credit and the purchaser or |
| 93 | assignee must file an application, waivers of confidentiality, |
| 94 | and affidavits to transfer the credit on a form provided by the |
| 95 | department and obtain the prior approval of the department for |
| 96 | such transfer. The department may not unreasonably withhold such |
| 97 | approval. The purchaser or assignee must use the tax credit in |
| 98 | the taxable year in which the purchase or assignment of the |
| 99 | credit is made. The transfer or purchase of any amount of the |
| 100 | tax credit may not be exchanged for less than 75 percent of the |
| 101 | credit's value. |
| 102 | (e) The combined total amount of tax credits that may be |
| 103 | granted and approved to all business enterprises under this |
| 104 | section during any calendar year is $15 million. Applications |
| 105 | may be filed with the department on or after March 20 for |
| 106 | qualified research expenses incurred within the preceding |
| 107 | calendar year, and credits shall be granted in the order in |
| 108 | which completed applications are received. |
| 109 | (3) RULES.-The department may adopt rules to administer |
| 110 | this section, including, but not limited to, rules prescribing |
| 111 | forms, application procedures and dates, and notification or |
| 112 | other procedures for the sale or assignment of a credit, and may |
| 113 | establish guidelines for making an affirmative showing of |
| 114 | qualification for a credit and any evidence needed to |
| 115 | substantiate a claim for credit under this section. |
| 116 | Section 3. This act shall take effect July 1, 2011, and is |
| 117 | effective for tax years beginning on or after January 1, 2012. |