House Bill 651

AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR TAXPAYERS THAT MAKE PAYMENTS MADE PURSUANT TO RESEARCH AGREEMENTS WITH COLLEGES AND RESEARCH CORPORATIONS; TO DEFINE CERTAIN TERMS FOR THE PURPOSES OF THIS ACT; TO PROVIDE FOR THE AMOUNT OF THE CREDIT AUTHORIZED IN THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "College Private Research Incentive Act."

SECTION 2. (1) The following words and phrases shall have the meanings ascribed in this section unless the context clearly requires otherwise:

(a) "College" means any college, community college, junior college, or university located in Mississippi and accredited by the Southern Association of Colleges and Schools.

(b) "Research agreement" means a written contract, grant, or c0ooperative agreement entered into between a taxpayer and a college or research corporation for the performance of experimental, developmental, or research work. Agreements contemplating research in the social sciences or humanities shall not be considered "research agreements."

(c) "Research corporation" means any research corporation formed under Section 37-147-15, if the corporation is wholly owned by a college and all income and profits of the corporation inure to the benefit of the college.

(d) "Research costs" means payments made to a college or research corporation according to a research agreement.

(2) (a) (i) Subject to the provisions of subparagraph (ii) of this paragraph, during each taxable year a taxpayer may earn and apply for and, if such application is approved by the Department of Revenue, be granted a credit (hereinafter referred to as a "College Private Research tax credit") which may be applied by the taxpayer against any income tax liability owed by the taxpayer under Section 27-7-1 et seq. The credit shall be equal to seven percent (7%) of the amount of money invested by the taxpayer in research costs.

(ii) A College Private Research tax credit shall be allowed against the income tax owed by a taxpayer for the taxable year in which the credit is earned as well. However, the amount of the tax credit applied by a taxpayer in a taxable year shall not exceed the total tax liability of the taxpayer for such taxes for that taxable year reduced by the sum of all other credits allowable to such taxpayer, except credit for tax payments made by or on behalf of the taxpayer. If the tax credit allowed under this section exceeds the total tax liability of the taxpayer for such taxes, then any unused credit may be carried forward by the taxpayer as a credit against subsequent tax liability for a period not to exceed five (5) taxable years.

(b) To qualify for a College Private Research tax credit, the taxpayer must:

(i) Submit an application to the Department of Revenue on a form prescribed by the department;

(ii) Pay an application fee of Two Hundred Dollars ($200.00); and

(iii) Prove to the satisfaction of the Department of Revenue that the taxpayer has incurred research costs according to a research agreement, or any amendment thereto, executed on or after July 1, 2012.

(c) The Department of Revenue may audit an applicant in order to verify the applicant's eligibility for the College Private Research tax credit.

(3) The Department of Revenue shall implement and administer the provisions of this section. The Department of Revenue shall adopt and promulgate such rules and regulations, in compliance with the Mississippi Administrative Procedures Law, as are necessary for the efficient and effective administration of this section in keeping with the purposes for which it is enacted. Such rules shall include provisions for (a) the Department of Revenue to certify the eligibility of an applicant for receipt of the College Private Research tax credit and the qualification of a claimant to claim the credit against income tax and (b) the presentation of an applicant's eligibility certification and any other documentation required to apply for and earn or claim a credit.

SECTION 2. This act shall take effect and be in force from and after July 1, 2012.