RCW 82.04.4452
Credit -- Research and development spending.
(Expires January 1, 2015.)
(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 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.
[2010 c 114 § 114; 2005 c 514 § 1003; 2004 c 2 § 2; 2000 c 103 § 7; 1997 c 7 § 4; 1994 sp.s. c 5 § 2.]
NOTES:
Application -- Finding -- Intent -- 2010 c 114: See notes following RCW 82.32.585.
Retroactive application -- 2005 c 514 § 1003: "Section 1003 of this act applies retroactively to June 10, 2004." [2005 c 514 § 1311.]
Interest and penalties from additional tax under section
1003(9)(a), chapter 514, Laws of 2005 -- 2005 c 514: "(1) A person
who owes additional tax as a result of section 1003(9)(a),
chapter 514, Laws of 2005 is liable for interest, but not
penalties as provided in RCW 82.32.090 (1) and (2), if the entire
additional tax liability is paid in full to the department of
revenue before January 1, 2006. Interest shall be assessed at
the rate provided for delinquent excise taxes under chapter 82.32 RCW, retroactively to the date the credit was claimed, and shall
accrue until the additional tax is repaid.
(2) Persons who fail to repay the full amount of additional
tax owed as a result of section 1003(9)(a), chapter 514, Laws of
2005 before January 1, 2006, are subject to all applicable
penalties and interest as provided in chapter 82.32 RCW on the
additional tax owing after December 31, 2005.
(3) This section expires December 31, 2010." [2005 c 514 §
1004.]
Effective date -- 2005 c 514: See note following RCW 82.04.4272.
Part headings not law -- Severability -- 2005 c 514: See notes following RCW 82.12.808.
Savings -- Effective date -- 1997 c 7: See notes following RCW 82.04.255.
Findings -- Effective date -- 1994 sp.s. c 5: See RCW 82.63.005 and 82.63.900.
Additional reporting requirements: RCW 82.32.590 and 82.32.600.