Virginia House Bill 1100 (Prior Session Legislation)

---

Spectrum: Partisan Bill (Democrat 1-0)
Status: Introduced on January 13 2016 - 25% progression, died in committee
Action: 2016-02-17 - Left in Finance
Pending: House Finance Committee
Text: Latest bill text (Prefiled) [HTML]

Research and development expenses tax credits. Modifies the existing research and development expenses tax credit and creates a similar tax credit for businesses with Virginia research and development expenses in excess of $5 million for the taxable year. The bill changes the existing tax credit by (i) extending the expiration date from January 1, 2019, to January 1, 2026, (ii) establishing an alternative computation for the tax credit at the election of the taxpayer beginning with taxable year 2016, and (iii) increasing from $6 million to $7 million the maximum amount of tax credits that may be granted by the Department of Taxation for each fiscal year beginning with fiscal year 2017. Under current law, a taxpayer is allowed a refundable credit equal to (a) 15 percent of the first $234,000 of the taxpayer's Virginia qualified research and development expenses that exceed a base amount or (b) if the research and development was conducted in conjunction with a Virginia college or university, 20 percent of the taxpayer's first $234,000 in Virginia qualified research and development expenses that exceed a base amount. Under the alternative computation established by the bill, the taxpayer will be allowed a refundable tax credit equal to 10 percent of the difference of (1) the taxpayer's Virginia qualified research and development expenses for the current taxable year and (2) 50 percent of such taxpayer's average Virginia qualified research and development expenses for the immediately preceding three taxable years. If the taxpayer did not pay or incur Virginia qualified research and development expenses in any one of the immediately preceding three years, the credit will equal seven percent of the taxpayer's Virginia qualified research and development expenses for the current taxable year. The maximum credit allowed to a taxpayer each year under the alternative computation will be $35,100 or $46,800 if the research and development was conducted in conjunction with a Virginia public or private college or university. The bill also creates a new tax credit beginning with taxable year 2016 for businesses with Virginia research and development expenses in excess of $5 million for the taxable year. The new tax credit will include the same elements as described above for the alternative computation, except that it is not refundable and there is no annual limit on the maximum amount of credits allowed to the taxpayer. In addition, the Department may grant up to $15 million in tax credits each fiscal year beginning with fiscal year 2017. The amount of the new tax credit that may be claimed by the taxpayer for each year may not exceed the taxpayer's Virginia income tax liability for such year. Any unused credit for the year may be carried forward and applied against the taxpayer's income taxes in the next 10 succeeding taxable years. The new research and development expenses tax credit expires January 1, 2026. Under the bill, a taxpayer with more than $5 million of Virginia qualified research and development expenses for the taxable year may only claim the new research and development expenses tax credit for such year.

Research and development expenses tax credits.

Del. Eileen Filler-Corn [D]

Date	Chamber	Action
2016-02-17	House	Left in Finance
2016-02-12	House	Subcommittee recommends laying on the table by voice vote
2016-02-04	House	Assigned Finance sub: Subcommittee #3
2016-01-13	House	Referred to Committee on Finance
2016-01-13	House	Prefiled and ordered printed; offered 01/13/16 16101910D

Chapter	Article	Section	Citation Type	Statute Text
58	1	439.12:08	(n/a)	See Bill Text
58	1	439.12:11	(n/a)	See Bill Text

Type	Source
Summary	https://lis.virginia.gov/cgi-bin/legp604.exe?161+sum+HB1100
Text	https://lis.virginia.gov/cgi-bin/legp604.exe?161+ful+HB1100+hil