§ 105-129.10. (Repealed effective for taxable years beginning on or after January 1, 2006) Credit for research and development. - North Carolina Statutes

§ 105‑129.10.  (Repealedeffective for taxable years beginning on or after January 1, 2006) Credit forresearch and development.

(a)        General Credit. – Ataxpayer that claims for the taxable year a federal income tax credit undersection 41(a) of the Code for increasing research activities is allowed acredit equal to five percent (5%) of the State's apportioned share of thetaxpayer's expenditures for increasing research activities. The State'sapportioned share of a taxpayer's expenditures for increasing researchactivities is the excess of the taxpayer's qualified research expenses for thetaxable year over the base amount, as determined under section 41 of the Code,multiplied by a percentage equal to the ratio of the taxpayer's qualifiedresearch expenses in this State for the taxable year to the taxpayer's totalqualified research expenses for the taxable year.

(b)        Alternative Credit.– A taxpayer that claims the alternative incremental credit under section41(c)(4) of the Code for increasing research activities is allowed a creditequal to twenty‑five percent (25%) of the State's apportioned share ofthe federal credit claimed. The State's apportioned share of the federal creditclaimed is the amount of the alternative incremental credit the taxpayer claimedunder section 41(c)(4) of the Code for the taxable year multiplied by apercentage equal to the ratio of the taxpayer's qualified research expenses inthis State for the taxable year to the taxpayer's total qualified researchexpenses for the taxable year. For the purpose of this subsection, the amountof the alternative incremental credit claimed by a taxpayer is determinedwithout regard to any reduction elected under section 280C(c) of the Code.

(c)        Definitions. – Asused in this section, the terms "qualified research expenses" and"base amount" have the meaning provided in section 41 of the Code.Notwithstanding G.S. 105‑228.90(b), as used in this section, the term"Code" means the Internal Revenue Code as enacted as of January 1,1999.

(d)        The credits allowedin this section and the credit allowed in Article 3F of this Chapter areexclusive. A taxpayer may elect to take only one of the three credits withrespect to its research activities in a taxable year. (1996, 2nd Ex. Sess., c. 13,s. 3.3; 1997‑277, § 1; 1998‑55, s. 1; 1999‑360, ss. 1, 2;2000‑173, s. 1(a); 2004‑124, s. 32D.1.)