Source: https://www.govinfo.gov/content/pkg/USCODE-2010-title26/html/USCODE-2010-title26-subtitleA-chap1-subchapA-partIV-subpartD-sec45C.htm
Timestamp: 2019-04-22 07:01:35+00:00

Document:
For purposes of section 38, the credit determined under this section for the taxable year is an amount equal to 50 percent of the qualified clinical testing expenses for the taxable year.
Except as otherwise provided in this paragraph, the term “qualified clinical testing expenses” means the amounts which are paid or incurred by the taxpayer during the taxable year which would be described in subsection (b) of section 41 if such subsection were applied with the modifications set forth in subparagraph (B).
(ii) by substituting “100 percent” for “65 percent” in paragraph (3)(A) of such subsection.
(C) Exclusion for amounts funded by grants, etc.
The term “qualified clinical testing expenses” shall not include any amount to the extent such amount is funded by any grant, contract, or otherwise by another person (or any governmental entity).
For purposes of this paragraph, section 41 shall be deemed to remain in effect for periods after June 30, 1995, and before July 1, 1996, and periods after December 31, 2011.
(iii) which is conducted by or on behalf of the taxpayer to whom the designation under such section 526 applies.
Human clinical testing shall be taken into account under subparagraph (A) only to the extent such testing is related to the use of a drug for the rare disease or condition for which it was designated under section 526 of the Federal Food, Drug, and Cosmetic Act.
Except as provided in paragraph (2), any qualified clinical testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section 41 for such taxable year.
Any qualified clinical testing expenses for any taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.
(B) affects more than 200,000 persons in the United States but for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug.
Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date such drug is designated under section 526 of the Federal Food, Drug, and Cosmetic Act.
(ii) such testing is conducted by a United States person or by any other person who is not related to the taxpayer to whom the designation under section 526 of the Federal Food, Drug, and Cosmetic Act applies.
No credit shall be allowed under this section with respect to any clinical testing conducted by a corporation to which an election under section 936 applies.
Rules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply for purposes of this section.
This section shall apply to any taxpayer for any taxable year only if such taxpayer elects (at such time and in such manner as the Secretary may by regulations prescribe) to have this section apply for such taxable year.
Sections 505(b), (i) and 526 of the Federal Food, Drug, and Cosmetic Act, referred to in subsecs. (b)(2)(A) and (d)(1), (2)(A)(ii), are classified to sections 355(b), (i) and 360bb, respectively, of Title 21, Food and Drugs.
Section 351 of the Public Health Service Act, referred to in subsec. (b)(2)(A)(ii)(II), is classified to section 262 of Title 42, The Public Health and Welfare.
2010—Subsec. (b)(1)(D). Pub. L. 111–312 substituted “December 31, 2011” for “December 31, 2009”.
2008—Subsec. (b)(1)(D). Pub. L. 110–343 substituted “December 31, 2009” for “December 31, 2007”.
2006—Subsec. (b)(1)(D). Pub. L. 109–432 substituted “2007” for “2005”.
2004—Subsec. (b)(1)(D). Pub. L. 108–311 substituted “December 31, 2005” for “June 30, 2004”.
1999—Subsec. (b)(1)(D). Pub. L. 106–170 substituted “June 30, 2004” for “June 30, 1999”.
1998—Subsec. (b)(1)(D). Pub. L. 105–277 substituted “June 30, 1999” for “June 30, 1998”.
1997—Subsec. (b)(1)(D). Pub. L. 105–34, §601(b)(2), substituted “June 30, 1998” for “May 31, 1997”.
Subsec. (b)(2)(A)(ii)(II). Pub. L. 105–115 struck out “or 507” after “505(b)”.
1996—Pub. L. 104–188, §1205(a)(1), renumbered section 28 of this title as this section.
Subsec. (a). Pub. L. 104–188, §1205(d)(1), substituted “For purposes of section 38, the credit determined under this section for the taxable year is” for “There shall be allowed as a credit against the tax imposed by this chapter for the taxable year”.
Subsec. (b)(1)(D). Pub. L. 104–188, §1204(e), inserted “, and before July 1, 1996, and periods after May 31, 1997” after “June 30, 1995”.
1993—Subsec. (b)(1)(D). Pub. L. 103–66, §13111(a)(2), substituted “June 30, 1995” for “June 30, 1992”.
Subsec. (e). Pub. L. 103–66, §13111(b), substituted “December 31, 1994” for “June 30, 1992”.
1991—Subsec. (b)(1)(D). Pub. L. 102–227, §102(b), substituted “June 30, 1992” for “December 31, 1991”.
Subsec. (e). Pub. L. 102–227, §111(a), substituted “June 30, 1992” for “December 31, 1991”.
1990—Subsec. (b)(1)(D). Pub. L. 101–508, §11402(b)(2), substituted “December 31, 1991” for “December 31, 1990”.
Subsec. (e). Pub. L. 101–508, §11411, substituted “December 31, 1991” for “December 31, 1990”.
1989—Subsec. (b)(1)(D). Pub. L. 101–239 substituted “1990” for “1989”.
1988—Subsec. (b)(1)(D). Pub. L. 100–647, §4008(c)(1), substituted “1989” for “1988”.
Subsec. (b)(2)(A)(ii)(II). Pub. L. 100–647, §1018(q)(1), amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “before the date on which an application with respect to such drug is approved under section 505(b) of such Act or, if the drug is a biological product, before the date on which a license for such drug is issued under section 351 of the Public Health Services Act, and”.
1986—Subsec. (b)(1). Pub. L. 99–514, §231(d)(3)(A)(i), (iv), substituted “41” for “30” in subpars. (A), (B), and (D), and substituted “1988” for “1985” in subpar. (D).
Subsec. (b)(2)(A)(ii)(I). Pub. L. 99–514, §1879(b)(1)(A), substituted “the date such drug” for “the date of such drug”.
Subsec. (b)(2)(A)(ii)(II). Pub. L. 99–514, §1879(b)(1)(B), inserted “or, if the drug is a biological product, before the date on which a license for such drug is issued under section 351 of the Public Health Services Act”.
Subsec. (c). Pub. L. 99–514, §231(d)(3)(A)(i), (ii), substituted “41” for “30” in pars. (1) and (2) and “41(b)” for “30(b)” in par. (2).
Subsec. (d)(4). Pub. L. 99–514, §231(d)(3)(A)(iii), substituted “section 41(f)” for “section 30(f)”.
Subsec. (e). Pub. L. 99–514, §232, substituted “1990” for “1987”.
1984—Pub. L. 98–369, §471(c), renumbered section 44H of this title as this section.
Subsec. (b)(1)(A), (B), (D). Pub. L. 98–369, §474(g)(1)(A), substituted “section 30” for “section 44F”.
Subsec. (c)(1). Pub. L. 98–369, §474(g)(1)(A), substituted “section 30” for “section 44F”.
Subsec. (c)(2). Pub. L. 98–369, §474(g)(1)(A), (B), substituted “section 30” for “section 44F” and “section 30(b)” for “section 44F(b)”.
Subsec. (d)(2). Pub. L. 98–369, §612(e)(1), substituted “section 26(b)” for “section 25(b)”.
Pub. L. 98–369, §474(g)(2), amended par. (2) generally, substituting “shall not exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b), reduced by the sum of the credits allowable under subpart A and section 27” for “shall not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under a section of this subpart having a lower number or letter designation than this section, other than the credits allowable by sections 31, 39, and 43. For purposes of the preceding sentence, the term ‘tax imposed by this chapter’ shall not include any tax treated as not imposed by this chapter under the last sentence of section 53(a)”.
Subsec. (d)(4). Pub. L. 98–369, §474(g)(1)(C), substituted “section 30(f)” for “section 44F(f)”.
Amendment by Pub. L. 111–312 applicable to amounts paid or incurred after Dec. 31, 2009, see section 731(c) of Pub. L. 111–312, set out as a note under section 41 of this title.
Amendment by Pub. L. 110–343 applicable to amounts paid or incurred after Dec. 31, 2007, see section 301(e)(2) of Pub. L. 110–343, set out as a note under section 41 of this title.
Amendment by Pub. L. 109–432 applicable to amounts paid or incurred after Dec. 31, 2005, see section 104(a)(3) of Pub. L. 109–432, set out as a note under section 41 of this title.
Amendment by Pub. L. 108–311 applicable to amounts paid or incurred after June 30, 2004, see section 301(b) of Pub. L. 108–311, set out as a note under section 41 of this title.
Amendment by Pub. L. 106–170 applicable to amounts paid or incurred after June 30, 1999, see section 502(a)(3) of Pub. L. 106–170, set out as a note under section 41 of this title.
Amendment by Pub. L. 105–277 applicable to amounts paid or incurred after June 30, 1998, see section 1001(c) of Pub. L. 105–277, set out as a note under section 41 of this title.
Amendment by section 601(b)(2) of Pub. L. 105–34 applicable to amounts paid or incurred after May 31, 1997, see section 601(c) of Pub. L. 105–34, set out as a note under section 41 of this title.
Amendment by section 1204(e) of Pub. L. 104–188 applicable to taxable years ending after June 30, 1996, and not to be taken into account under section 6654 or 6655 of this title in determining amount of any installment required to be paid for a taxable year beginning in 1997, see section 1204(f) of Pub. L. 104–188, set out as a note under section 41 of this title.
Amendment by section 1205(a)(1), (b), (d)(1), (2) of Pub. L. 104–188 applicable to amounts paid or incurred in taxable years ending after June 30, 1996, see section 1205(e) of Pub. L. 104–188, set out as a note under section 45K of this title.
Amendment by section 1018(q)(1) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Amendment by section 4008(c)(1) of Pub. L. 100–647 applicable to taxable years beginning after Dec. 31, 1988, see section 4008(d) of Pub. L. 100–647, set out as a note under section 41 of this title.
Amendment by section 231(d)(3)(A) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1985, see section 231(g) of Pub. L. 99–514, set out as a note under section 41 of this title.
Amendment by section 701(c)(2) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an Effective Date note under section 55 of this title.
Amendment by section 1275(c)(4) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 1277 of Pub. L. 99–514, set out as a note under section 931 of this title.
Amendment by section 474(g) of Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, and to carrybacks from such years, see section 475(a) of Pub. L. 98–369, set out as a note under section 21 of this title.
Amendment by section 612(e)(1) of Pub. L. 98–369, applicable to interest paid or accrued after December 31, 1984, on indebtedness incurred after December 31, 1984, see section 612(g) of Pub. L. 98–369, set out as an Effective Date note under section 25 of this title.
For applicability of amendment by section 701(c)(2) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100–647 be treated as if it had been included in the provision of Pub. L. 99–514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100–647, set out as a note under section 861 of this title.
1 So in original. The semicolon probably should be a comma.

References: §601
 §1205
 §1205
 §1204
 §13111
 §13111
 §102
 §111
 §11402
 §11411
 §4008
 §1018
 §231
 §1879
 §1879
 §231
 §231
 §232
 §471
 §474
 §474
 §474
 §612
 §474
 §474