2023 Rhode Island General Laws › Title 44 - Taxation › Chapter 44-31 - Investment Tax Credit › Section 44-31-1.1. - Biotechnology investment tax credit.

§ 44-31-1.1. Biotechnology investment tax credit.
(a)
Any company primarily engaged in commercial biological research and development or manufacturing and sale of biotechnology products or active pharmaceutical ingredients which pays its employees that work a minimum of thirty (30) hours per week within the state a median annual wage equal or greater than one hundred and twenty-five percent (125%) of the average annual wage paid by all employers in the state to employees that work a minimum of thirty (30) hours per week within the state, and provides benefits typical to the biotechnology industry, shall be allowed a credit of ten percent (10%) of the cost or other basis for federal tax purposes of tangible personal property and other tangible property, including buildings and structural components of buildings acquired, constructed, reconstructed, or leased with situs in Rhode Island and principally used in the production of biotechnology products after December 31, 2001.
(1)
“Biotechnology products” means those products that are applicable to the prevention, treatment, or cure of a disease or condition of human beings, and that are produced using living organisms, or materials derived from living organisms, or cellular, sub cellular, or molecular component of living organisms.
(2)
“Principally” means the company’s sales of biotechnology products or costs related to the development of biotechnology products constitute at least fifty percent of its overall receipts or its overall costs respectively.
(3)
“Tangible personal property” and “other tangible property” includes buildings and structural components of buildings acquired, constructed, reconstructed, or leased with situs in Rhode Island and principally used in the production of biotechnology products after December 31, 2001 that:
(A)
is depreciable pursuant to 26 USC. Section 167,
(B)
has a useful life of four (4) years or more, and
(C)
is acquired by purchase as defined in 26 U.S.C. § 179(d), or
(D)
is acquired by lease based on the fair market value of the property at the inception of the lease times the portion of the depreciable life of the property represented by the term of the lease, excluding renewal options, for a term of twenty (20) years; and
(E)
does not include vehicles or furniture.
(4)
“Wages” means all remuneration paid for personal services, including commissions and bonuses and the cash value of all remuneration paid in any medium other than cash and all other remuneration which is defined as taxable wages by the Internal Revenue Service, as certified by the department of labor and training.
(b)
If the amount of credit allowable for any taxable year is less than the amount of credit available to the taxpayer, any amount of credit not used in the taxable year will be available the following year or years not to exceed fifteen (15) years and may be deducted from the taxpayer’s tax for the year or years.
(1)
The credit may be extended beyond seven (7) years only in a year in which:
(A)
The company maintains an average quarterly number of employees for each calendar year that is nine and one half percent (9.5%) greater than average quarter number of employees in the fourth year of the initial credit. Employees are defined as those that work a minimum of thirty (30) hours per week within the state with benefits typical to the biotechnology industry;
(B)
The company’s average quarterly median wage is not less than the company’s average of its quarterly median wage for the three (3) previous calendar years;
(C)
The company pays its employees a median annual wage equal or greater than one hundred and twenty-five percent (125%) of the average annual wage paid by all employers in the state. Employees are defined as those that work a minimum of thirty (30) hours per week within the state with benefits typical to the biotechnology industry; and
(D)
The department of labor and training certifies to the tax administrator that the criteria in (A) — (C) have been met.
(2)
Unused credits after the seventh year are forfeited permanently if any of these wage and employment criteria are unmet after the seventh year.
(3)
The company may determine the order in which the credits generated in different tax years are utilized, provided that credits available for more than seven (7) years may not reduce current year liability by more than seventy-five percent (75%); and provided further that in no event, can liability be reduced below the minimum tax prescribed in § 44-11-2.
History of Section.
P.L. 2006, ch. 31, § 2; P.L. 2006, ch. 32, § 2; P.L. 2006, ch. 409, § 2; P.L. 2006, ch. 505, § 2.