BILL REQ. #: H-0098.1
| State of Washington | 63rd Legislature | 2013 Regular Session |
Read first time 01/22/13. Referred to Committee on Technology & Economic Development.
AN ACT Relating to extending the business and occupation tax credit for research and development; amending RCW 82.04.4452; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 82.04.4452 and 2010 c 114 s 114 are each amended to
read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for each person whose research and development spending during
the year in which the credit is claimed exceeds 0.92 percent of the
person's taxable amount during the same calendar year.
(2) The credit is calculated as follows:
(a) Determine the greater of the amount of qualified research and
development expenditures of a person or eighty percent of amounts
received by a person other than a public educational or research
institution in compensation for the conduct of qualified research and
development;
(b) Subtract 0.92 percent of the person's taxable amount from the
amount determined under (a) of this subsection;
(c) Multiply the amount determined under (b) of this subsection by
the following:
(i) For the period June 10, 2004, through December 31, 2006, the
person's average tax rate for the calendar year for which the credit is
claimed;
(ii) For the calendar year ending December 31, 2007, the greater of
the person's average tax rate for that calendar year or 0.75 percent;
(iii) For the calendar year ending December 31, 2008, the greater
of the person's average tax rate for that calendar year or 1.0 percent;
(iv) For the calendar year ending December 31, 2009, the greater of
the person's average tax rate for that calendar year or 1.25 percent;
(v) For the calendar year ending December 31, 2010, and thereafter,
1.50 percent.
For purposes of calculating the credit, if a person's reporting
period is less than annual, the person may use an estimated average tax
rate for the calendar year for which the credit is claimed by using the
person's average tax rate for each reporting period. A person who uses
an estimated average tax rate must make an adjustment to the total
credit claimed for the calendar year using the person's actual average
tax rate for the calendar year when the person files its last return
for the calendar year for which the credit is claimed.
(3) Any person entitled to the credit provided in subsection (2) of
this section as a result of qualified research and development
conducted under contract may assign all or any portion of the credit to
the person contracting for the performance of the qualified research
and development.
(4) The credit, including any credit assigned to a person under
subsection (3) of this section, must be claimed against taxes due for
the same calendar year in which the qualified research and development
expenditures are incurred. The credit, including any credit assigned
to a person under subsection (3) of this section, for each calendar
year may not exceed the lesser of two million dollars or the amount of
tax otherwise due under this chapter for the calendar year.
(5) For any person claiming the credit, including any credit
assigned to a person under subsection (3) of this section, whose
research and development spending during the calendar year in which the
credit is claimed fails to exceed 0.92 percent of the person's taxable
amount during the same calendar year or who is otherwise ineligible,
the department must declare the taxes against which the credit was
claimed to be immediately due and payable. The department must assess
interest, but not penalties, on the taxes against which the credit was
claimed. Interest must be assessed at the rate provided for delinquent
excise taxes under chapter 82.32 RCW, retroactively to the date the
credit was claimed, and accrues until the taxes against which the
credit was claimed are repaid. Any credit assigned to a person under
subsection (3) of this section that is disallowed as a result of this
section may be claimed by the person who performed the qualified
research and development subject to the limitations set forth in
subsection (4) of this section.
(6) A person claiming the credit provided in this section must file
a complete annual survey with the department under RCW 82.32.585.
(7) For the purpose of this section:
(a) "Average tax rate" means a person's total tax liability under
this chapter for the calendar year for which the credit is claimed
divided by the taxpayer's total taxable amount under this chapter for
the calendar year for which the credit is claimed.
(b) "Qualified research and development expenditures" means
operating expenses, including wages, compensation of a proprietor or a
partner in a partnership as determined under rules adopted by the
department, benefits, supplies, and computer expenses, directly
incurred in qualified research and development by a person claiming the
credit provided in this section. The term does not include amounts
paid to a person other than a public educational or research
institution to conduct qualified research and development. Nor does
the term include capital costs and overhead, such as expenses for land,
structures, or depreciable property.
(c) "Qualified research and development" ((shall have)) has the
same meaning as in RCW 82.63.010.
(d) "Research and development spending" means qualified research
and development expenditures plus eighty percent of amounts paid to a
person other than a public educational or research institution to
conduct qualified research and development.
(e) "Taxable amount" means the taxable amount subject to the tax
imposed in this chapter required to be reported on the person's
combined excise tax returns for the calendar year for which the credit
is claimed, less any taxable amount for which a credit is allowed under
RCW 82.04.440.
(8) This section expires January 1, ((2015)) 2035.