2009 Louisiana Laws TITLE 47 Revenue and taxation :: RS 47:6015 Research and development tax credit

§6015.  Research and development tax credit

A.  The Legislature of Louisiana hereby finds and declares that the health, safety, and welfare of the people of this state are dependent upon the continued encouragement, development, growth, and expansion of the private sector within the state.  Therefore, it is declared to be the purpose of this Section to encourage new and continuing efforts to conduct research and development activities within this state.

B.(1)  Any taxpayer who employs more than fifty Louisiana residents and claims for the taxable year a federal income tax credit under 26 U.S.C. §41(a) for increasing research activities shall be allowed a refundable tax credit to be applied against income and corporation franchise taxes due.

(2)  Any taxpayer who employs up to fifty Louisiana residents and incurs qualified research expenses as defined in 26 U.S.C. §41(b), for the taxable year, shall be allowed a refundable tax credit to be applied against income and corporation franchise taxes due.

(3)  Each taxpayer seeking the credits authorized in this Section shall apply to the Department of Economic Development for the credits.  The taxpayer shall remit an application fee of two hundred fifty dollars with the application.  The application shall include all of the following:

(a)  In cases where the taxpayer employs more than fifty Louisiana residents, a federal income tax return and supporting documentation that shows the amount of the federal research credit for the same taxable year.  The supporting documentation for a taxpayer who employs up to fifty Louisiana residents shall show the amount of the qualified research expenses for the same taxable year.  If claiming the credit under Subsection D of this Section, the taxpayer shall also remit supporting documentation for the federal Small Business Innovation Research Grant.

(b)  The total amount of qualified research expenses and the qualified research expenses in this state.

(c)  The total number of Louisiana residents employed by the taxpayer and the number of those Louisiana residents directly engaged in research and development.

(d)  The average wages of the Louisiana resident employees not directly engaged in research and development and the average wages of the Louisiana resident employees directly engaged in research and development.

(e)  The average value of benefits received by all Louisiana resident employees.

(f)  The cost of health insurance coverage offered to all Louisiana resident employees.

(g)  Any other information required by the Department of Economic Development.

(4)  The Department of Economic Development shall approve or disapprove each application.  No credits shall be granted to a taxpayer under this Section unless the credit is approved by the Department of Economic Development.

C.(1)  The amount of the credit authorized in this Section shall be equal to either:

(a)  Eight percent of the state's apportioned share of the taxpayer's expenditures for increasing research activities, if the taxpayer is an entity that employs one hundred or more Louisiana residents.

(b)  Twenty percent of the state's apportioned share of the taxpayer's expenditures for increasing research activities, if the taxpayer is an entity that employs fifty to ninety-nine Louisiana residents.

(c)  Twenty-five percent of the state's apportioned share of the federal research credit claimed for research expenditures in the state if the taxpayer claims the alternative incremental tax credit under 26 U.S.C. §41.

(d)  Forty percent of the state's apportioned share of the taxpayer's qualified research expenses conducted in this state if the taxpayer is an entity that employs fewer than fifty Louisiana residents.

(2)  The state's apportioned share of a taxpayer's expenditures for increasing research activities shall be the excess of the taxpayer's qualified research expenses for the taxable year over the base amount, as determined under 26 U.S.C. §41, multiplied by a percentage equal to the ratio of the qualified research expenses in this state for the taxable year to the taxpayer's total qualified research expenses for the taxable year.

(3)(a)  All entities taxed as corporations for Louisiana income or corporation franchise tax purposes shall claim any credit allowed under this Section on their corporation income and corporation franchise tax return.

(b)  Individuals shall claim any credit allowed under this Section on their individual income tax return.

(c)  Estates or trusts shall claim any credit allowed under this Section on their fiduciary income tax returns.

(d)  Entities not taxed as corporations shall claim any credit allowed under this Section on the returns of the partners or members as follows:

(i)  Corporate partners or members shall claim their share of the credit on their corporation income or corporation franchise tax returns.

(ii)  Individual partners or members shall claim their share of the credit on their individual income tax returns.

(iii)  Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.

D.  A taxpayer who receives a federal Small Business Innovation Research Grant as created by the Small Business Innovation Development Act of 1982 (P.L. 97-219), reauthorized by the Small Business Research and Development Enhancement Act (P.L. 102-564), and reauthorized again by the Small Business Reauthorization Act of 2000 (P.L. 106-554), shall be allowed a refundable tax credit in an amount equal to forty percent of the award received during the tax year.

E.  As used in this Section, the following terms shall have the meaning hereafter ascribed to them, unless the context clearly indicates otherwise:

(1)  "Department" shall mean the Department of Economic Development.

(2)  The terms "base amounts", "qualified research expenses", and "qualified research" shall have the same meanings as those terms are defined in 26 U.S.C. §41, as amended.

F.  The department shall administer the provisions of this Section and shall have the following powers and duties in addition to those granted by other laws of this state:

(1)  To monitor the implementation and operation of this Section and conduct a continuing evaluation of the program.

(2)  To assist any taxpayer in obtaining the benefits of any incentive or inducement program authorized by Louisiana law.

(3)  To promulgate rules and regulations regarding the sale of tax credits allowed by this Section, in consultation with the secretary of the Department of Revenue, in accordance with the Administrative Procedure Act.

(4)  To receive information from the Department of Revenue regarding the identity of the taxpayer and the amount of credit claimed for any credits claimed pursuant to this Section.  Such information shall not be public record and shall be subject to the same prohibition of disclosure as in the possession of the Department of Revenue.

G.(1)  Recovery of credits by Department of Revenue.  Credits granted under this Section, but later disallowed in whole or in part, may be recovered by the secretary of the Department of Revenue from the taxpayer applicant through any collection remedy authorized by R.S. 47:1561 that is initiated within three years from December thirty-first of the year in which the credit was originally granted.  The only interest that may be assessed and collected on these recovered credits is interest at a rate three percentage points above the rate provided in R.S. 9:3500(B)(1), which shall be computed from the original due date of the return on which the disallowed credit was taken.

(2)  The provisions of this Subsection are in addition to and shall not limit the authority of the secretary of the Department of Revenue to assess or to collect under any other provision of law.  This includes the disallowance of any disallowed credit claimed by a taxpayer who received the credit through purchase or through a distribution by an entity not taxed as a corporation.

H.  No credit shall be allowed pursuant to this Section for research expenditures incurred or Small Business Innovation Research Grant funds received after December 31, 2013.

Acts 2002, 1st Ex. Sess., No. 9, §1, eff. for all income tax years beginning on or after Jan. 1, 2003, and franchise tax years beginning on or after Jan. 1, 2004; Acts 2005, No. 402, §1, eff. July 1, 2005; Acts 2009, No. 477, §1, eff. July 9, 2009.

NOTE:  Acts 2002, 1st Ex. Sess., No. 9 §2, provided that the Act would become null and void on Dec. 31, 2006.  Acts 2009, No. 477, §2, deleted the termination language.