41-1507

41-1507. Tax credit for increased research
activity; qualification for refund

A. The department of commerce shall receive applications and evaluate and certify
taxpayers who otherwise qualify for income tax credits for increased research activities
to further qualify for income tax refunds.

B. An application for a refund of the taxpayer's credit must include:

1. The taxpayer's name, address and taxpayer identification number and a telephone
number and e-mail address of a person responsible for the application.

2. A general description of the taxpayer's business and the research activities
conducted by the taxpayer.

3. The number of full-time employees on the taxpayer's payroll on December 31 of
the taxable year. Only taxpayers employing fewer than one hundred fifty full-time
employees qualify for a refund of the taxpayer's income tax credit.

4. The amount of the taxpayer's income tax credit for the taxable year.

5. Any other information required by the department.

C. Each application shall include a processing fee equal to one per cent of the
taxpayer's tax credit being refunded.

D. The department shall process and evaluate each application and within thirty
days after receiving the application either:

1. Issue to the applicant a certificate of qualification for the refund.

2. Notify the applicant of denial of the application with specific reasons for the
denial. A denial of the application does not preclude a subsequent application if the
applicant is able to correct any error or deficiency.

E. The department shall not approve refunds exceeding a total of five million
dollars in any calendar year. Refunds are allowed on a first come, first served basis,
according to the date of application. An approved amount applies against the dollar limit
for the year in which the application was submitted. If, at the end of any year, an
unused balance occurs under the dollar limit prescribed by this subsection, the balance
shall be reallocated for the purposes of this section in the following year.

F. The department of commerce, with the cooperation of the department of revenue,
shall adopt rules and publish and prescribe forms and procedures as necessary to
effectuate the purposes of this section.