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12 Aug 2013

Wisconsin Casts a Wider Net to Encourage Innovation

Wisconsin Act 20, signed into law recently extends the benefits of the current Wisconsin Research Expense Credit to individuals, S – Corporations, partnerships, and certain limited liability companies.   The expansion is effective for taxable periods beginning January 1, 2013.

Wisconsin credit details include:

  • 5% credit for companies using the regular credit calculation method
  • 2.65% to 3.75% tiered credit system for companies electing the Alternative Incremental Credit method
  • Unused credit can be carried forward up the 15 years and applied to Wisconsin income or franchise taxes
5 Aug 2013

Texas Goes Retro to Attract Innovative Companies

Texas HB 800 reinstates the Texas Franchise Tax Credit for qualified research activities.  The credit allows the company to take the tax credit or elect to take a sales tax exemption for R&D equipment.  The credit is in place for activities between January 1, 2014, and December 31, 2026.

Other Texas Franchise Tax Credit details include:

  • Credit amount equals 5% of excess research expenses over 50% of the 3 prior years average (essentially the Federal ASC method)
  • Credit amount is increased by 25% if the company contracts with at least one public or private institution of higher education to perform research activities
  • Use limited to 50% of Texas Franchise Tax liability
  • May be carried forward up to 20 years
  • Opportunity to elect a sales tax exemption instead of a credit

1 Aug 2013

Flying car wows crowds at air show

Congrats to Terrafugia, whose “Transition” made its first public flight.  Read the full article from The Times and watch it in action here.

30 Jul 2013

Indiana Reinforces Commitment to Innovative Business

Continuing the trend in Indiana, as of May 2013, the legislature and Gov. Mike Pence doubled down on creating a favorable environment for innovative companies.  House Enrolled Act No. 1545 reinforces and clarifies that equipment used for R&D is tax exempt for both the party selling the equipment and the company conducting the research activities.

Additional benefits of the Act include:

  • Applies to prototypes and smaller expensed items not typically considered a long-term asset
  • Exempts contract research companies which typically are involved in only a portion of the research activity

These benefits are in addition to the Indiana Research Expense Tax Credit that provides a generous tax credit for qualified product and process improvement or research activities.

18 Feb 2013

Hawaii Joins Growing Chorus on Research Credit

Hawaii joins a growing number of states realizing the importance of high-tech industry.  In order to encourage research and development activities, SB1349 proposes to reinstate Hawaii’s state credit for research activities.

The credit sunset at the end of calender year 2010, while the proposed legistlation provides for the research activities credit until 2015.  The 20% credit allows taxpayers to offset net income tax liability and follows Federal IRC Sec. 41 Research and Experimentation guidelines.

30 Jan 2013

Research Tax Credit Exteded for 2012 & 2013

Congress has extended the Research and Experimentation Tax Credit for two more years with the passage of H.R.8, the American Taxpayer Relief Act of 2012.  H.R.8 provides for the R&E tax credit in both 2012 & 2013, largely unchanged from previous years.

H.R.8 made a slight change to the method for handling qualified research expenditures during an acquisition.  The legislation keeps in place the dual calculation methods which typically generate a credit of between 4%-6%  of qualified research expenditures.  Credit generated can be carried back one year and carried forward for 15 years.