00                             HOUSE BILL NO. 118                                                                          
01 "An Act relating to a tax credit for corporate income taxes paid for qualified research                                 
02 and development expenditures; and providing for an effective date."                                                     
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 43.20 is amended by adding a new section to Article 1 to read:                                    
05            Sec. 43.20.047. Qualified research and development tax credit. (a) Subject                                 
06       to the terms and conditions of this section, and in addition to any other credit                                  
07       authorized to the taxpayer by this chapter, a taxpayer may apply 20 percent of the                                
08       taxpayer's expenditure for qualified research and development attributable to this state                          
09       for the taxable year over the base amount as a credit not to exceed $10 million against                           
10       the state tax liability imposed on the taxpayer under this chapter.                                               
11            (b)  Qualified research and development expenditures are attributable to this                                
12       state if the research and development is being conducted in this state or the payroll of                          
13       employees conducting the research and development is in this state. In this subsection,                           
14       payroll of an employee is in this state if compensation is paid to an employee in this                            
01       state and reported as paid in this state in the quarterly contribution report under                               
02       AS 23.20 to the Department of Labor and Workforce Development.                                                    
03            (c)  If the tax credit under this section exceeds the taxpayer's tax liability after                         
04       other tax credits are taken under this chapter for the year in which the expenditure is                           
05       incurred, the excess of the tax credit over the liability may be carried forward for up to                        
06       seven years. If an unused credit is carried forward to a tax year from an earlier year,                           
07       the credit arising in the earliest year is applied first against the tax liability for the year.                  
08            (d)  A person may not claim a credit under this section for qualified research                               
09       and development expenditures that were deducted in the calculation of tax liability                               
10       under AS 43.20.011(e) or for which any other credit, including any federal credit, has                            
11       been apportioned to this state and claimed under AS 43.20.021.                                                    
12            (e)  Each year, the department shall report the names of taxpayers who claimed                               
13       credits under this section in the prior year, the total cumulative amount of credits                              
14       granted to all taxpayers under this section for the prior tax year, and the total                                 
15       cumulative number of employees conducting the research and development for which                                  
16       all taxpayers claim the credit. Notwithstanding AS 40.25.100 and AS 43.05.230, a                                  
17       taxpayer claiming the credit under this section consents to                                                       
18                 (1)  the public disclosure of its name and status as a beneficiary of the                               
19       credit;                                                                                                           
20                 (2)  inclusion of the amount of the credits granted to it under this                                    
21       section and the number of employees conducting the research and development for                                   
22       which it claims the credit in the cumulative total calculated by the department for                               
23       reporting purposes; and                                                                                           
24                 (3)  report on the impact of the credit on research and development for                                 
25       each year that the credit is claimed.                                                                             
26            (f)  In this section,                                                                                        
27                 (1)  "base amount" means the average of qualified research and                                          
28       development expenditures attributable to this state for the three tax years immediately                           
29       preceding the taxable year for which the credit is being claimed;                                                 
30                 (2)  "qualified research and development" means qualified research as                                   
31       defined in 26 U.S.C. 41(d) (Internal Revenue Code), as amended, that is attributable to                           
01       this state.                                                                                                       
02    * Sec. 2. This Act takes effect immediately under AS 01.10.070(c).