2006 Utah Code - 59-10-1013 — Credits for machinery, equipment, or both primarily used for conducting qualified research or basic research -- Carry forward -- Commission to report modification or repeal of federal credits.

     59-10-1013.   Credits for machinery, equipment, or both primarily used for conducting qualified research or basic research -- Carry forward -- Commission to report modification or repeal of federal credits.
     (1) As used in this section:
     (a) "Basic research" is as defined in Section 41(e)(7), Internal Revenue Code, except that the term includes only basic research conducted in this state.
     (b) "Equipment" includes:
     (i) computers;
     (ii) computer equipment; and
     (iii) computer software.
     (c) "Purchase price":
     (i) includes the cost of installing an item of machinery or equipment; and
     (ii) does not include sales or use taxes imposed on an item of machinery or equipment.
     (d) "Qualified organization" is as defined in Section 41(e)(6), Internal Revenue Code.
     (e) "Qualified research" is as defined in Section 41(d), Internal Revenue Code, except that the term includes only qualified research conducted in this state.
     (2) (a) Except as provided in Subsection (2)(c), for taxable years beginning on or after January 1, 1999, but beginning before December 31, 2010, a claimant, estate, or trust shall qualify for the following nonrefundable tax credits for the taxable year in which the machinery, equipment, or both, meets the requirements of either Subsection (2)(a)(i) or (2)(a)(ii):
     (i) a tax credit of 6% of the purchase price of either machinery, equipment, or both:
     (A) purchased by the claimant, estate, or trust during the taxable year;
     (B) that is not exempt from sales or use taxes; and
     (C) that is primarily used to conduct qualified research in this state; and
     (ii) a tax credit of 6% of the purchase price paid by the claimant, estate, or trust for either machinery, equipment, or both:
     (A) purchased by the claimant, estate, or trust during the taxable year;
     (B) that is not exempt from sales or use taxes;
     (C) that is donated to a qualified organization; and
     (D) that is primarily used to conduct basic research in this state.
     (b) If a claimant, estate, or trust qualifying for a tax credit under Subsection (2)(a) seeks to claim the tax credit, the claimant, estate, or trust shall:
     (i) claim the tax credit or a portion of the tax credit for the taxable year immediately following the taxable year for which the claimant, estate, or trust qualifies for the tax credit;
     (ii) carry the tax credit or a portion of the tax credit forward as provided in Subsection (5); or
     (iii) claim a portion of the tax credit and carry forward a portion of the tax credit as provided in Subsections (2)(b)(i) and (ii).
     (c) Notwithstanding Subsection (2)(a), if a claimant, estate, or trust qualifies for a tax credit under Subsection (2)(a) for a purchase of machinery, equipment, or both, the claimant, estate, or trust may not claim the tax credit or carry the tax credit forward if the machinery, equipment, or both, is primarily used to conduct qualified research in the state for a time period that is less than 12 consecutive months.
     (3) For purposes of claiming a tax credit under this section, a unitary group as defined in Section 59-7-101 is considered to be one claimant.

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     (4) Notwithstanding the provisions of Section 41(h), Internal Revenue Code, the tax credits provided for in this section shall not terminate if the credits terminate under Section 41, Internal Revenue Code.
     (5) Notwithstanding the provisions of Sections 39 and 41(g), Internal Revenue Code, governing the carry forward and carry back of federal tax credits, if the amount of a tax credit claimed by a claimant, estate, or trust under this section exceeds a claimant's, estate's, or trust's tax liability under this chapter for a taxable year, the amount of the tax credit exceeding the liability:
     (a) may be carried forward for a period that does not exceed the next 14 taxable years; and
     (b) may not be carried back to a taxable year preceding the current taxable year.
     (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the commission may make rules for purposes of this section prescribing a certification process for qualified organizations to ensure that either machinery, equipment, or both provided to the qualified organization is to be primarily used to conduct basic research in this state.
     (7) If a federal credit under Section 41, Internal Revenue Code, is modified or repealed, the commission shall report the modification or repeal to the Tax Review Commission within 60 days after the day on which the modification or repeal becomes effective.

Renumbered and Amended by Chapter 223, 2006 General Session