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Ch. 516
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2000 LAWS OF MARYLAND
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1. IS CONDUCTED IN THIS STATE; AND
2. IS NOT FUNDED, WITHIN THE MEANING OF § 41(H)(D)(4)(H)
§ 41(D)(4)(H) OF THE INTERNAL REVENUE CODE, BY ANY GRANT, CONTRACT, OR
OTHERWISE BY A PERSON OR GOVERNMENTAL ENTITY OTHER THAN THE PERSON
CLAIMING THE CREDIT UNDER THIS SECTION; AND
(II) QUALIFY AS:
1. RESEARCH OR EXPERIMENTAL EXPENDITURES
DEDUCTIBLE UNDER §174 OF THE INTERNAL REVENUE CODE, DETERMINED
WITHOUT REGARD TO § 280C(C) OF THE INTERNAL REVENUE CODE OR ANY
ELECTIONS MADE BY A TAXPAYER TO AMORTIZE EXPENSES ON ITS FEDERAL INCOME
TAX RETURN THAT WERE OTHERWISE DEDUCTIBLE; OR
2. BASIC RESEARCH PAYMENTS AS DEFINED UNDER § 41 OF
THE INTERNAL REVENUE CODE.
(3) " MARYLAND BASE AMOUNT " MEANS THE BASE AMOUNT AS DEFINED
IN § 41(C) OF THE INTERNAL REVENUE CODE THAT IS ATTRIBUTABLE TO MARYLAND,
DETERMINED BY:
(I) SUBSTITUTING " MARYLAND QUALIFIED RESEARCH AND
DEVELOPMENT EXPENSE" FOR" QUALIFIED RESEARCH EXPENSE";
(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.
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- 2768 -
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