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PARRIS N. GLENDENING, Governor
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Ch. 515
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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 § 4KB* 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 CALENDAR1 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) THE TOTAL AMOUNT OF CREDITS APPROVED BY THE
DEPARTMENT UNDER SUBSECTION (B)(1) OF THIS SECTION MAY NOT EXCEED
$10,000,000 $3,000,000 FOR ANY CALENDAR YEAR
(II) 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
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- 2763 -
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