HB412: relative to the research and development tax credit.

2009 SESSION

09-0665

09/01

HOUSE BILL 412-FN-A

AN ACT relative to the research and development tax credit.

SPONSORS: Rep. Hinkle, Hills 19

COMMITTEE: Ways and Means

ANALYSIS

This bill increases the maximum aggregate amount of research and development tax credits which may be issued to all taxpayers for any fiscal year. The bill also changes certain amounts used to calculate each taxpayer’s credit.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0665

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT relative to the research and development tax credit.

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

1 Research and Development Tax Credit. Amend RSA 77-A:5, XIII(a)(1) and (2) to read as follows:

(1) The aggregate of tax credits issued by the commissioner to all taxpayers claiming the credit shall not exceed [$1,000,000] $2,000,000 for any fiscal year, except that any amount of the credit less than $1,000,000 that is not claimed in the fiscal year ending June 30, 2008 may be claimed in the fiscal year ending June 30, 2009.

(2) Each credit shall be used to offset the taxpayer’s tax liability within the subsequent 5 tax years. The amount of the credit shall be the lesser of:

(A) [Ten] Fifteen percent of the excess of the qualified manufacturing research and development expenses for the taxable year over the base amount;

(B) The proportional share of the maximum aggregate credit amount allowed in subparagraph (1);

(C) [$50,000] $75,000.

2 Effective Date. This act shall take effect June 30, 2009.

LBAO

09-0665

01/12/09

HB 412-FN-A - FISCAL NOTE

AN ACT relative to the research and development tax credit.

FISCAL IMPACT:

The Department of Revenue Administration states this bill will decrease state revenue by $1,000,000 per year in FY 2009 through FY 2012. This bill will have no fiscal impact on county or local revenues and state, county, or local expenditures.

METHODOLOGY:

This bill increases the maximum aggregate amount of the research and development tax credits which may be issued to all taxpayers for any fiscal year. This bill also changes certain amounts used to calculate each taxpayer’s credit. Based on the assumption that all the credit which is granted will be utilized in each year, the Department of Revenue Administration states this bill will decrease state revenues by the amount of the aggregate increase in credits granted. Current law allows for $1,000,000 in credits to be issued by the Commissioner. The proposed legislation increases the aggregate amount of credits allowed to be issued to $2,000,000 thereby reducing state revenues by $1,000,000 in FY 2009 and each year thereafter.

The Department notes that the increase in the maximum allowable requested amount from $50,000 to $75,000 and the increase in qualified wages from 10% to 15%, will not impact the full utilization of the aggregate credit available. The credits will be repealed on July 1, 2013.