----------------------------------------------------------------- ¦ REFERENCE TITLE: rural economic development; university patents ¦ ----------------------------------------------------------------- ¦ ¦ ¦ ¦ ¦ State of Arizona ¦ ¦ House of Representatives ¦ ¦ Forty-fourth Legislature ¦ ¦ Second Regular Session ¦ ¦ 2000 ¦ ----------------------------------------------------------------- ¦ HB 2004 ¦ ----------------------------------------------------------------- ¦ Introduced by ¦ ¦ Representatives Jarrett, Flake, Johnson, Groscost ¦ -----------------------------------------------------------------
AN ACT
AMENDING TITLE 43, CHAPTER 10, ARTICLE 5, ARIZONA REVISED STATUTES, BY ADDING SECTION 43-1088.01; AMENDING TITLE 43, CHAPTER 11, ARTICLE 6, ARIZONA REVISED STATUTES, BY ADDING SECTION 43-1179; RELATING TO INDIVIDUAL AND CORPORATE INCOME TAX CREDITS.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1088.01, to read:
43-1088.01. Credit for businesses manufacturing product patented at state university
A. A CREDIT IS ALLOWED AGAINST THE TAXES IMPOSED BY THIS TITLE FOR A TAXPAYER WHO MEETS THE FOLLOWING REQUIREMENTS:
1. THE TAXPAYER MUST EITHER:
(a) BEGIN CONDUCTING BUSINESS AFTER JUNE 30, 2000 IN A COUNTY WITH A POPULATION OF LESS THAN FIVE HUNDRED THOUSAND PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS.
(b) RELOCATE AN ONGOING BUSINESS AFTER JUNE 30, 2000 FROM A COUNTY WITH A POPULATION OF FIVE HUNDRED THOUSAND PERSONS OR MORE TO A COUNTY WITH A POPULATION OF LESS THAN FIVE HUNDRED THOUSAND PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS.
2. THE BUSINESS MUST BE PRIMARILY ENGAGED IN MANUFACTURING ONE OR MORE PRODUCTS THAT WERE PATENTED AFTER JUNE 30, 2000 AT A UNIVERSITY UNDER THE JURISDICTION OF THE ARIZONA BOARD OF REGENTS.
B. THE AMOUNT OF THE CREDIT IS EQUAL TO THE COST OF THE PATENT TO THE TAXPAYER DURING THE TAXABLE YEAR, WHETHER IN PURCHASING THE PATENT OR AS PERIODIC PAYMENTS FOR THE RIGHT TO MANUFACTURE PRODUCTS PURSUANT TO THE PATENT. A TAXPAYER IS ELIGIBLE TO CLAIM A CREDIT UNDER THIS SECTION IN NOT MORE THAN FIVE TAXABLE YEARS.
C. CO-OWNERS OF THE BUSINESS, INCLUDING PARTNERS IN A PARTNERSHIP AND SHAREHOLDERS OF AN S CORPORATION, AS DEFINED IN SECTION 1361 OF THE INTERNAL REVENUE CODE, MAY EACH CLAIM ONLY THE PRO RATA SHARE OF THE CREDIT ALLOWED UNDER THIS SECTION BASED ON THE OWNERSHIP INTEREST. THE TOTAL OF THE CREDITS ALLOWED ALL SUCH OWNERS MAY NOT EXCEED THE AMOUNT THAT WOULD HAVE BEEN ALLOWED A SOLE OWNER.
D. IF THE ALLOWABLE CREDIT EXCEEDS THE TAXES OTHERWISE DUE UNDER THIS SECTION, OR IF THERE ARE NO TAXES DUE UNDER THIS TITLE, THE AMOUNT OF THE CREDIT NOT USED TO OFFSET TAXES UNDER THIS TITLE MAY BE CARRIED FORWARD TO THE NEXT FIVE CONSECUTIVE TAXABLE YEARS AS A CREDIT AGAINST SUBSEQUENT YEARS' INCOME TAX LIABILITY. A CREDIT MAY BE CARRIED FORWARD UNDER THIS SUBSECTION NOTWITHSTANDING THE FIVE YEAR LIMITATION UNDER SUBSECTION B.
Sec. 2. Title 43, chapter 11, article 6, Arizona Revised Statutes, is amended by adding section 43-1179, to read:
43-1179. Credit for businesses manufacturing product patented at state university
A. A CREDIT IS ALLOWED AGAINST THE TAXES IMPOSED BY THIS TITLE FOR A TAXPAYER WHO MEETS THE FOLLOWING REQUIREMENTS:
1. THE TAXPAYER MUST EITHER:
(a) BEGIN CONDUCTING BUSINESS AFTER JUNE 30, 2000 IN A COUNTY WITH A POPULATION OF LESS THAN FIVE HUNDRED THOUSAND PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS.
(b) RELOCATE AN ONGOING BUSINESS AFTER JUNE 30, 2000 FROM A COUNTY WITH A POPULATION OF FIVE HUNDRED THOUSAND PERSONS OR MORE TO A COUNTY WITH A POPULATION OF LESS THAN FIVE HUNDRED THOUSAND PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS.
2. THE BUSINESS MUST BE PRIMARILY ENGAGED IN MANUFACTURING ONE OR MORE PRODUCTS THAT WERE PATENTED AFTER JUNE 30, 2000 AT A UNIVERSITY UNDER THE JURISDICTION OF THE ARIZONA BOARD OF REGENTS.
B. THE AMOUNT OF THE CREDIT IS EQUAL TO THE COST OF THE PATENT TO THE TAXPAYER DURING THE TAXABLE YEAR, WHETHER IN PURCHASING THE PATENT OR AS PERIODIC PAYMENTS FOR THE RIGHT TO MANUFACTURE PRODUCTS PURSUANT TO THE PATENT. A TAXPAYER IS ELIGIBLE TO CLAIM A CREDIT UNDER THIS SECTION IN NOT MORE THAN FIVE TAXABLE YEARS.
C. CO-OWNERS OF THE BUSINESS, INCLUDING CORPORATE PARTNERS IN A PARTNERSHIP, MAY EACH CLAIM ONLY THE PRO RATA SHARE OF THE CREDIT ALLOWED UNDER THIS SECTION BASED ON THE OWNERSHIP INTEREST. THE TOTAL OF THE CREDITS ALLOWED ALL SUCH OWNERS MAY NOT EXCEED THE AMOUNT THAT WOULD HAVE BEEN ALLOWED A SOLE OWNER.
D. IF THE ALLOWABLE CREDIT EXCEEDS THE TAXES OTHERWISE DUE UNDER THIS SECTION, OR IF THERE ARE NO TAXES DUE UNDER THIS TITLE, THE AMOUNT OF THE CREDIT NOT USED TO OFFSET TAXES UNDER THIS TITLE MAY BE CARRIED FORWARD TO THE NEXT FIVE CONSECUTIVE TAXABLE YEARS AS A CREDIT AGAINST SUBSEQUENT YEARS' INCOME TAX LIABILITY. A CREDIT MAY BE CARRIED FORWARD UNDER THIS SUBSECTION NOTWITHSTANDING THE FIVE YEAR LIMITATION UNDER SUBSECTION B.
Sec. 3. Retroactivity
This act is effective retroactively from and after June 30, 2000.