[§235-110.9] High-technology business investment tax credit.
(a) There shall be allowed to each taxpayer, subject to the taxes imposed by this chapter, a high technology investment tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. The tax credit shall be an amount equal to ten per cent of the investment made by the taxpayer in each qualified high technology business, up to a maximum allowed credit of $500,000 for the taxable year for the investment made by the taxpayer in a qualified high technology business.(b) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. For the purpose of this section, "net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.
(c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.
(d) As used in this section:
"Computer software" means a set of computer programs, procedures, or associated documentation concerned with the operation and function of a computer system, and includes both systems and application programs and subdivisions, such as assemblers, compilers, routines, generators, and utility programs.
"Investment" means a nonrefundable investment, at risk, as that term is used in section 465 (with respect to deductions limited to amount at risk) of the Internal Revenue Code, in a qualified high technology business, of cash that is transferred to the qualified high technology business, the transfer of which is in connection with a transaction in exchange for stock, interests in partnerships, joint ventures, or other entities, licenses (exclusive or nonexclusive), rights to use technology, marketing rights, warrants, options, or any items similar to those included herein, including but not limited to options or rights to acquire any of the items included herein. The nonrefundable investment is entirely at risk of loss where repayment depends upon the success of the qualified high technology business. If the money invested is to be repaid to the taxpayer, no repayment except for dividends or interest shall be made for at least three years from the date the investment is made. The annual amount of any dividend and interest payment to the taxpayer shall not exceed twelve per cent of the amount of the investment.
(e) For the purposes of this section:
"Qualified high technology business" means:
(1) A business, employing or owning capital or property, or maintaining an office, in this State; and which
(2) (A) Conducts one hundred per cent of its activities in performing qualified research in this State; or
(B) Receives one hundred per cent of its gross income derived from qualified research; provided that the income is received from products sold from, manufactured, or produced in the State; or services performed in this State.
The term "qualified high technology business" does not include:
(1) Any trade or business involving the performance of services in the field of law, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, or brokerage services;
(2) Any banking, insurance, financing, leasing, rental, investing, or similar business; any farming business, including the business of raising or harvesting trees; any business involving the production or extraction of products of a character with respect to which a deduction is allowable under section 611 (with respect to allowance of deduction for depletion), 613 (with respect to basis for percentage depletion), or 613A (with respect to limitation on percentage depleting in cases of oil and gas wells) of the Internal Revenue Code;
(3) Any business operating a hotel, motel, restaurant, or similar business; and
(4) Any trade or business involving a hospital, a private office of a licensed health care professional, a group practice of licensed health care professionals, or a nursing home.
"Qualified research" means:
(1) The same as in section 41(d) of the Internal Revenue Code; or
(2) Developing, designing, modifying, programming, and licensing computer software;
except that it shall not include research conducted outside the State.
(f) This section shall not apply to taxable years beginning after December 31, 2005. [L 1999, c 178, §24]