§235-7.3  Royalties derived from patents,copyrights, or trade secrets excluded from gross income.  (a)  In additionto the exclusions in section 235-7, there shall be excluded from gross income,adjusted gross income, and taxable income, amounts received by an individual ora qualified high technology business as royalties and other income derived fromany patents, copyrights, and trade secrets:

(1)  Owned by the individual or qualified hightechnology business; and

(2)  Developed and arising out of a qualified hightechnology business.

(b)  With respect to performing arts products,this exclusion shall extend to:

(1)  The authors of performing arts products, or anyparts thereof, without regard to the application of the work-for-hire doctrineunder United States copyright law;

(2)  The authors of performing arts products, or anyparts thereof, under the work-for-hire doctrine under United States copyrightlaw; and

(3)  The assignors, licensors, and licensees of anycopyright rights in performing arts products, or any parts thereof.

(c)  For the purposes of this section:

"Performing arts products" means:

(1)  Audio files, video files, audiovideo files,computer animation, and other entertainment products perceived by or throughthe operation of a computer; and

(2)  Commercial television and film products for saleor license, and reuse or residual fee payments from these products.

"Qualified high technology business"means a business that conducts more than fifty per cent of its activities inqualified research.

"Qualified research" means:

(1)  The same as in section 41(d) of the InternalRevenue Code;

(2)  The development and design of computer softwarefor ultimate commercial sale, lease, license or to be otherwise marketed, foreconomic consideration.  With respect to the software's development and design,the business shall have substantial control and retain substantial rights tothe resulting intellectual property;

(3)  Biotechnology;

(4)  Performing arts products;

(5)  Sensor and optic technologies;

(6)  Ocean sciences;

(7)  Astronomy; or

(8)  Nonfossil fuel energy-related technology. [L1999, c 178, §22; am L 2000, c 297, §6; am L 2001, c 221, §7; am L 2004, c 215,§6]