HB1203: establishing a research and development tax credit against the business profits tax.

HB 1203-FN-A - AS INTRODUCED

2003 SESSION

03-2188

09/10

HOUSE BILL 1203-FN-A

AN ACT establishing a research and development tax credit against the business profits tax.

SPONSORS: Rep. Elliott, Hills 42; Rep. Mock, Carr 4; Rep. Wall, Straf 72; Rep. P. Sullivan, Hills 50; Rep. Hansen, Hills 47

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes a research and development tax credit against the business profits tax.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03-2188

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

AN ACT establishing a research and development tax credit against the business profits tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Paragraph; Business Profits Tax; Research and Development Tax Credit. Amend RSA 77-A:5 by inserting after paragraph XI the following new paragraph:

XII.(a) There shall be allowed a research and development tax credit equal to 15 percent of qualified manufacturing research and development expenditures made or incurred during the taxable period. For purposes of this paragraph the term "qualified manufacturing research and development expenditures" shall mean any wages paid or incurred to an employee of the business organization for services rendered by such employee within this state within the meaning of RSA 77-A:3, I(b), if:

(1) Such wages may be treated as research and development expenditures under section 174 of the United States Internal Revenue Code; and

(2) Such services are undertaken for the purpose of discovering information which constitutes qualified research and development as defined in section 41 of the United States Internal Revenue Code.

(b) In this paragraph, "employee" means an employee, as defined in section 3401(c) of the United States Internal Revenue Code, who is also an eligible employee, as defined in RSA 77-A:1, XXIII.

(c) In no event shall the credit allowed under this paragraph exceed 5 percent of the tax due under this chapter before any credits under RSA 77-A:5 are taken into account, and the credit allowed under this paragraph shall be limited so that no more than 50 percent of such credit shall be attributable to wages paid to an employee who is not an "eligible employee" as defined in RSA 77-A:1, XXIII.

(d) The research and development tax credit shall apply to eligible research and development costs that occur on or after July 1, 2004.

2 Effective Date. This act shall take effect July 1, 2004.