To amend the Internal Revenue Code of 1986 to make a portion of research credit refundable for certain small businesses engaging in specified medical research.
Bill: H.R.7504 | Sponsor: Rep. Buchanan, Vern (R-FL)
Policy area: Taxation

Summary:
This bill allows for the refundability of a portion of the tax credit for increasing research activities for small businesses (gross receipts not exceeding $1 million) engaged in specified medical research. Under the Public Health Service Act, specified medical research means research with respect to qualified countermeasures (i.e., a drug, biological product, or device for preventing harm from any biological agent or from a condition that may result in adverse health consequences or death).

To amend the Internal Revenue Code of 1986 to make a portion of 
  research credit refundable for certain small businesses engaging in 
                      specified medical research.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REFUNDABLE PORTION OF RESEARCH CREDIT FOR SMALL BUSINESSES 
              ENGAGING IN SPECIFIED MEDICAL RESEARCH.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(i) Refundable Portion for Small Businesses Engaging in Specified 
Medical Research.--
            ``(1) In general.--At the election of a medical research 
        small business, the portion of the credit determined under this 
        section for the taxable year which is properly allocable to 
        specified medical research shall be treated (other than for 
        purposes of section 280C) as a credit allowed under subpart C 
        (and not this subpart).
            ``(2) Medical research small business.--For purposes of 
        this subsection, the term `medical research small business' 
        means any domestic C corporation--
                    ``(A) which conducts any specified medical research 
                during the taxable year, and
                    ``(B) the gross receipts of which (determined under 
                the rules of subsection (c)) for the taxable year do 
                not exceed $1,000,000.
            ``(3) Specified medical research.--For purposes of this 
        subsection, the term `specified medical research' means any 
        qualified research with respect to qualified countermeasures 
        (as defined in section 319F-1(a)(2) of the Public Health 
        Service Act (42 U.S.C. 247d-6a(a)(2)).
            ``(4) Election.--Any election under this subsection for any 
        taxable year--
                    ``(A) shall specify the amount of the credit to 
                which such election applies,
                    ``(B) shall be made on or before the due date 
                (including extensions) of the return of tax for the 
                taxable year,
                    ``(C) may not be made for any taxable year with 
                respect to any portion of the credit determined under 
                this section with respect to which an election is made 
                under subsection (h), and
                    ``(D) may be revoked only with the consent of the 
                Secretary.
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations for purposes of this subsection as may be necessary 
        or appropriate for determining proper allocation to specified 
        medical research of the portion of any credit allowed to a 
        taxpayer for a taxable year under this section.''.
    (b) Conforming Amendment.--Section 1324(b) of title 31, United 
States Code, is amended by inserting ``41(i),'' after ``6428,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.
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