1997 Regular Session
By: Senator(s) Carter
Senate Bill 2121
AN ACT TO PROVIDE AN INCOME AND CORPORATE FRANCHISE TAX CREDIT FOR TAXPAYERS PERFORMING CERTAIN TYPES OF RESEARCH AND DEVELOPMENT ACTIVITIES; TO AUTHORIZE SUCH CREDIT TO BE CARRIED FORWARD TEN YEARS UNDER CERTAIN CIRCUMSTANCES; TO REQUIRE THE MISSISSIPPI DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT TO REPORT ANNUALLY REGARDING THE IMPACT OF SUCH CREDIT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) For purposes of this section, the term "Section 41" shall mean Section 41 of the United States Internal Revenue Code, codified as 26 U.S.C. 41, and the terms "qualified research expenses," "base amount," "qualified organization base period amount," "basic research" and any other terms affecting the calculation of the credit granted in this section shall, unless the context otherwise requires, have the same meanings as set forth in Section 41 as in effect on January 1, 1997, and as may be amended from time to time thereafter, but shall be limited to those sums expended or incurred for research conducted within the State of Mississippi.
(2) For the calendar year 1997 and subsequent calendar years, any taxpayer may credit against taxes otherwise due the State of Mississippi under the Income Tax Law of 1952 or the corporation franchise tax laws contained in Chapter 13 of Title 27, Mississippi Code of 1972, or both, (a) an amount equal to twenty percent (20%) of the excess, if any, of the taxpayer's "qualified research expenses" over the taxpayer's "base amount," and (b) an amount equal to twenty percent (20%) of the taxpayer's "basic research payments"; provided, however, that if the taxpayer chooses to apply a portion of the credit to income taxes due and a portion to franchise taxes due, the total of the credit applied to both taxes shall not exceed the total credit obtained under items (a) and (b) of this subsection.
(3) If the credit allowed under subsection (2) of this section for any tax year exceeds the income and franchise tax liability of the taxpayer for that year, the unused credit may be carried forward and credited against income and/or franchise tax liability for the following ten (10) successive tax years to the extent not offset by the income and franchise taxes otherwise due in all intervening years between the year in which the expense was incurred and the year in which the credit is claimed, but may not be carried forward thereafter or refunded.
(4) The amount of the taxpayer's "qualified research expenses" over the taxpayer's "base amount" and of the taxpayer's "basic research payments" which is in excess of the twenty percent (20%) granted as a tax credit may be deducted if otherwise allowed by law.
SECTION 2. The Mississippi Department of Economic and Community Development shall report annually to the Legislature regarding the impact of the credit granted in Section 1 of this act on research, development and economic growth in the state. Each report shall (a) show the overall annual increase in research and development expenditures and payments for the most recent year for which data is available and for each of the previous five (5) years, (b) estimate the number of jobs created or retained by such research and product or other development since January 1, 1997, as compared to the number of similar jobs created during the ten (10) years preceding January 1, 1997, and (c) state the net economic impact on the state as a result of the tax credit granted in Section 1 of this act. On or before May 1 of each calendar year, a copy of the report shall be filed with the Governor, the Secretary of the Senate, the Clerk of the House of Representatives, the Chairman of the House Ways & Means Committee and the Chairman of the Senate Finance Committee. The State Tax Commission and all taxpayers claiming the credit shall cooperate with the Department of Economic and Community Development in providing the information required for this report.
SECTION 3. This act shall take effect and be in force from and after January 1, 1997.