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Ch. 516
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PARRIS N. GLENDENING, Governor
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(II) PASS-THROUGH AND ALLOCATION OF THE CREDIT IN THE
CASE OF ESTATES AND TRUSTS, PARTNERSHIPS, UNINCORPORATED TRADES OR
BUSINESSES, AND S CORPORATIONS;
(III) ADJUSTMENTS IN THE CASE OF ACQUISITIONS AND
DISPOSITIONS DESCRIBED IN § 41(F)(3) OF THE INTERNAL REVENUE CODE; AND
(IV) DETERMINATION OF THE CREDIT IN THE CASE OF SHORT
TAXABLE YEARS.
(3) THE REGULATIONS ADOPTED UNDER PARAGRAPH (2) OF THIS
SUBSECTION SHALL BE BASED ON PRINCIPLES SIMILAR. TO THE PRINCIPLES
APPLICABLE UNDER § 41 OF THE INTERNAL REVENUE' CODE AND REGULATIONS
ADOPTED THEREUNDER.
(E) (F) (1) THE DEPARTMENT OP BUSINESS AND ECONOMIC
DEVELOPMENT AND THE COMPTROLLER JOINTLY SHALL ADOPT REGULATIONS TO
PRESCRIBE STANDARDS FOR DETERMINING WHEN RESEARCH OR DEVELOPMENT IS
CONSIDERED CONDUCTED IN THE STATE FOR PURPOSES OF DETERMINING THE
CREDIT UNDER THIS SECTION.
(2) IN ADOPTING REGULATIONS UNDER THIS SUBSECTION, THE
DEPARTMENT AND THE COMPTROLLER MAY CONSIDER:
(I) THE LOCATION WHERE SERVICES ARE PERFORMED;
(II) THE RESIDENCE OR BUSINESS LOCATION OF THE PERSON OR
PERSONS PERFORMING SERVICES;
(III) THE LOCATION WHERE SUPPLIES USED IN RESEARCH AND
DEVELOPMENT ARE CONSUMED; AND
(IV) ANY OTHER FACTORS THAT THE DEPARTMENT DETERMINES
ARE RELEVANT FOR THE DETERMINATION.
SECTION 2. AND BE IT FURTHER ENACTED, That:
(a) Except as otherwise provided in this section, this Act shall be applicable to
all taxable years beginning after December 31, 1999 but before January 1, 2005.
(b) If a taxpayer's taxable year for income tax purposes is not the calendar
year:
(1) for the taxable year that ends in calendar year 2000, the taxpayer
may apply for a prorated credit for research and development expenses paid or
incurred in the taxable year for that part of the taxable year that falls in calendar
year 2000; and
(2) for the taxable year that begins in calendar year 2004, the taxpayer
may apply for only a prorated credit for research and development expenses paid or
incurred in the taxable year for that part of the taxable year that falls in calendar
year 2004.
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- 2771 -
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