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Ch. 98
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2005 LAWS OF MARYLAND
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(ii) substituting "Maryland qualified research and development" for
"qualified research"; and
(iii) using, instead of the "fixed base percentage":
1. the percentage that the Maryland qualified research and
development expense for the 4 taxable years immediately preceding the taxable year
in which the expense is incurred is of the gross receipts for those years; or
2. for a taxpayer who has fewer than 4 but at least 1 prior
taxable year, the percentage as determined under item 1 of this item, determined
using the number of immediately preceding taxable years that the taxpayer has.
(4) "Maryland gross receipts" means gross receipts that are reasonably
attributable to the conduct of a trade or business in this State, determined under
methods prescribed by the Comptroller based on standards similar to the standards
under § 10-402 of this title.
(5) "Maryland qualified research and development" means qualified
research as defined in § 41(d) of the Internal Revenue Code that is conducted in this
State.
(6) "Maryland qualified research and development expenses" means
qualified research expenses as defined in § 41(b) of the Internal Revenue Code
incurred for Maryland qualified research and development.
(b) Subject to the limitations of this section, an individual or a corporation
may claim credits against the State income tax in an amount equal to:
(1) 3% of the Maryland qualified research and development expenses,
not exceeding the Maryland base amount for the individual or corporation, paid or
incurred by the individual or corporation during the taxable year; and
(2) 10% of the amount by which the Maryland qualified research and
development expenses paid or incurred by the individual or corporation during the
taxable year exceed the Maryland base amount for the individual or corporation.
(c) (1) By September 15 of the calendar year following the end of the taxable
year in which the Maryland qualified research and development expenses were
incurred, an individual or corporation shall submit an application to the Department
for the credits allowed under subsection (b)(1) and (2) of this section.
(2) (i) Except as provided under paragraph (4) of this subsection, the
total amount of credits approved by the Department under subsection (b)(1) of this
section may not exceed [$3,000,000] $6,000,000 for any calendar year.
(ii) Subject to paragraph (4) of this subsection, if the total amount
of credits applied for by all individuals and corporations under subsection (b)(1) of this
section exceeds the maximum specified under subparagraph (i) of this paragraph, the
Department shall approve a credit under subsection (b)(1) of this section for each
applicant in an amount equal to the product of multiplying the credit applied for by
the applicant times a fraction:
- 838 -
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