HB 2004 provides a personal and corporate income tax
credit for taxpayers engaged in business that manufacture products in a rural
Arizona county and that have been patented at a state university.
Provisions
·Provides personal and corporate income tax credits for
businesses manufacturing products patented at state universities beginning new
operations or relocating existing operations after June 30, 2000, in a county
in this state with a population of fewer than 500,000.The business must be operating in the county
during the taxable year in which the credit is claimed.
·Caps the credit to the lessor of $100,000 or the
expense of the patent.
·Provides that an income tax deduction is not allowed if
the taxpayer takes the credit for the same patent expenses.
·Provides that the business’ primary manufacturing
activity involves products patented after June 30, 2000, by a university under
the jurisdiction of the Arizona Board of Regents.
·Limits the tax credit amount to the cost of the patent
each year, whether the patent is purchased or periodic payments are made to the
patent holder, for up to five years.
·Provides that the tax credit allotted to co-owners must
not exceed the credit amount that would have been allowed one sole owner, and
it must be distributed proportionately to the co-owners, according to their
ownership interest.
·Provides that if the amount of the tax credit exceeds
the amount of the tax for the current year, the taxpayer may rollover the
excess tax credit for the succeeding years for up to 5 years.
·Contains an effective date of December 31, 1999.
Ways and Means Committee Amendment:
·Clarifies that an income tax deduction is not allowed
if the taxpayer takes the credit for the same patent expense.
·Clarifies the rural county must be in this state.
·Provides that the business must be operating in the
county during the taxable year that the credit is claimed.
·Caps the credit amount to the lessor of $100,000 or the
expense of the patent.
·Defines the terms “conducting business” and “relocating
an ongoing business” to mean that more than 50 per cent of the businesses
property and payroll must be in the qualified county.
·Changes the effective date tax years beginning from and
after December 31, 1999.
The Ways and Means Committee amendment
was adopted in the Committee of the Whole.