2005 Idaho Code - 63-3029G — CREDITS FOR RESEARCH ACTIVITIES CONDUCTED IN THIS STATE -- CARRY FORWARD

                                  TITLE  63
                             REVENUE AND TAXATION
                                  CHAPTER 30
                                  INCOME TAX
    63-3029G.  CREDITS FOR RESEARCH ACTIVITIES CONDUCTED IN THIS STATE --
CARRY FORWARD.
    (1)  (a) Subject to the limitations of this section, for taxable years
    after January 1, 2001, there shall be allowed to a taxpayer a
    nonrefundable credit against taxes imposed by sections 63-3024, 63-3025
    and 63-3025A, Idaho Code, for increasing research activities in Idaho
    beginning, at the election of the taxpayer, either:
         (i)   January 1, 2001, or
         (ii)  The first day of the taxpayer's taxable year beginning in 2001.
    (b)  The credit allowed by subsection (1)(a) of this section shall be the
    sum of:
         (i)   Five percent (5%) of the excess of qualified research expenses
         for research conducted in Idaho over the base amount; and
         (ii)  Five percent (5%) basic research payments allowable under
         subsection (e) of section 41 of the Internal Revenue Code for basic
         research conducted in Idaho.
    (c)  Subject to the limitation in subsection (3) of this section, a
    taxpayer making the election permitted by subsection (1)(a)(i) of this
    section, credit for research activities occurring prior to the beginning
    of the taxpayer's taxable year beginning in 2001 shall be claimed on the
    taxpayer's return for its taxable year 2001 in addition to credit relating
    to activity in that year.
    (2)  As used in this section:
    (a)  The terms "qualified research expenses," "qualified research," "basic
    research payments" and "basic research" shall be as defined in section 41
    of the Internal Revenue Code except that the research must be conducted in
    Idaho.
    (b)  The term "base amount" shall mean an amount calculated as provided in
    sections 41(c) and 41(h) of the Internal Revenue Code, except that:
         (i)   The base amount does not include the calculation of the
         alternative incremental credit provided for in section 41(c)(4) of
         the Internal Revenue Code;
         (ii)  A taxpayer's gross receipts include only those gross receipts
         attributable to sources within this state as provided in subsections
         (q) and (r) of section 63-3027, Idaho Code; and
         (iii) Notwithstanding section 41(c) of the Internal Revenue Code, for
         purposes of calculating the base amount, a taxpayer:
              (A)  May elect to be treated as a start-up company as provided
              in section 41(c)(3)(B) of the Internal Revenue Code, regardless
              of whether the taxpayer meets the requirements  of section
              41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and
              (B)  May not revoke an election to be treated as a start-up
              company.
    (3)  The credit allowed by subsection (1)(a) of this section together with
any credits carried forward under subsection (5) of this section shall not
exceed the amount of tax due under sections 63-3024, 63-3025 and 63-3025A,
Idaho Code, after allowance for all other credits permitted by this chapter.
When credits earned in more than one (1) taxable year are available, the
oldest credits shall be applied first.
    (4)  In the case of a group of corporations filing a combined report under
subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
of the group but not used by that member may be used by another member of the
group. For a combined group of corporations, any member of the group may claim
credit carried forward unless the member who earned the credit is no longer
included in the combined group.
    (5)  The credit allowed by subsection (1)(a) of this section shall be
claimed for the taxable year during which the taxpayer qualifies for the
credit. If the credit exceeds the limitation under subsection (3) of this
section, the excess amount may be carried forward for a period that does not
exceed the next fourteen (14) taxable years.
    (6)  In addition to other needed rules, the state tax commission may
promulgate rules prescribing, in the case of S corporations, partnerships,
trusts or estates, a method of attributing the credit under this section to
the shareholders, partners or beneficiaries in proportion to their share of
the income from the S corporation, partnership, trust or estate.