§5219-M. High-technology investment tax credit








1. Definitions. 
As used in this section, unless the context otherwise indicates, the following terms
have the following meanings.





A. "High-technology activity" means:



(1) The design, creation and production of computer software, computer equipment,
supporting communications components and other accessories that are directly associated
with computer software and computer equipment; and






(2) The provision of Internet access services and advanced telecommunications services. [2001, c. 358, Pt. M, §1 (AMD); 2001, c. 358, Pt. M, §6 (AFF).]














B. "Investment credit base" means the total adjusted basis of the eligible equipment
for federal income tax purposes of the taxpayer on the date that the equipment was
placed into service for the first time in the State by the taxpayer or other person
during the tax year for which the credit is claimed. In computing the adjusted basis
of the eligible equipment on the date placed in service for the first time in the
State, the total allowable depreciation of the equipment for the tax year must be
multiplied by a fraction the numerator of which is the number of days that the equipment
was in service in the State during the tax year and the denominator of which is the
total number of days that the equipment was in service during the tax year. [1997, c. 668, §31 (AMD); 1997, c. 668, §42 (AFF).]











C. "Eligible equipment" means all computer equipment, electronics components and accessories,
communications equipment and computer software placed into service in the State and
used primarily in high-technology activity, provided that otherwise eligible equipment
used in wire line telecommunications must be capable of transmitting data at 200 kilobits
or more per second in at least one direction and otherwise eligible equipment used
in wireless telecommunications equipment must be capable of transmitting data at 42
kilobits or more per second in at least one direction. [2001, c. 358, Pt. M, §2 (AMD); 2001, c. 358, Pt. M, §6 (AFF).]











D. "Primarily" means more than 50% of the time. [1999, c. 414, §47 (NEW).]










E. "Qualified lessor" means a person that leases or subleases eligible equipment to
a person that is engaged primarily in high technology activity, but only when:



(1) The eligible equipment is used primarily in the high technology activity engaged
in by the lessee or sublessee;






(2) The lessor derived aggregate total lease payments from personal property of at
least 3 times the total payments received from eligible equipment during the taxable
year; and






(3) The lease or sublease upon which the credit is based qualifies as a lease of
property for federal income tax purposes under the guidelines contained in Revenue
Procedure 2001-28 of the United States Department of the Treasury, Internal Revenue
Service. [2003, c. 673, Pt. G, §1 (NEW); 2003, c. 673, Pt. G, §3 (AFF).]











[
2003, c. 673, Pt. G, §1 (AMD);
2003, c. 673, Pt. G, §3 (AFF)
.]








1-A. Credit allowed. 
The following persons are allowed a credit as follows.





A. Unless entitlement to the credit is waived by the user pursuant to paragraph B:



(1) A person engaged primarily in high technology activity that purchases and uses
eligible equipment in that activity may claim a credit in the amount of that person's
investment credit base subject to the limitations provided by subsection 4; or






(2) A person engaged primarily in a high technology activity that leases and uses
eligible equipment in that activity may claim a credit in the amount of the lease
payments made on the eligible equipment in each tax year, except that if the eligible
equipment is depreciable by that person for federal income tax purposes, the credit
is based on that person's investment credit base subject to the limitations provided
by subsection 4. [2001, c. 358, Pt. M, §3 (AMD); 2001, c. 358, Pt. M, §6 (AFF).]














B. When a qualified lessor provides the assessor with satisfactory evidence that the
lessee or sublessee of eligible equipment has waived its right to claim a credit under
this section that it is otherwise entitled to claim with respect to that equipment:



(1) A qualified lessor that leases eligible equipment may claim a credit in the
amount of the lessee's investment credit base to the extent of the credits waived
by the lessee, net of any lease payments received for the eligible equipment in the
taxable year, subject to the limitations provided by subsection 4; and






(2) A qualified lessor that subleases eligible equipment may claim a credit in the
amount of the lease payments made on the eligible equipment in each tax year, net
of sublease payments received in the taxable year, except that if the eligible equipment
is depreciable by the sublessee for federal income tax purposes, the credit is based
on the sublessee's investment credit base to the extent of the credits waived by the
sublessee subject to the limitations provided by subsection 4. [2003, c. 673, Pt. G, §2 (AMD); 2003, c. 673, Pt. G, §3 (AFF).]











[
2003, c. 673, Pt. G, §2 (AMD);
2003, c. 673, Pt. G, §3 (AFF)
.]








2. Purchaser of eligible equipment; credit allowed. 




[
1997, c. 668, §42 (AFF);
1997, c. 668, §33 (RP)
.]








3. Lessor of eligible equipment; credit allowed. 




[
1997, c. 668, §42 (AFF);
1997, c. 668, §33 (RP)
.]








4. Limitations. 
The credit allowed by this section, including amounts carried to the tax year pursuant
to subsection 5, may not be used:





A. To reduce a person's tax liability under this Part to less than zero; [2001, c. 358, Pt. M, §4 (NEW); 2001, c. 358, Pt. M, §6 (AFF).]











B. To reduce a person's tax liability under this Part to less than the amount of the
taxpayer's tax liability in the preceding taxable year after the allowance of any
other credits taken pursuant to this chapter; or [2001, c. 358, Pt. M, §4 (NEW); 2001, c. 358, Pt. M, §6 (AFF).]











C. Except as otherwise provided by subsection 5, paragraph B, to reduce a person's tax
liability by more than $100,000, after the allowance of all other tax credits except
for the credit allowed under section 5219-L. [2015, c. 267, Pt. DD, §27 (AMD).]







[
2015, c. 267, Pt. DD, §27 (AMD)
.]








5. Carry over to succeeding years. 
Unused credits may be carried forward to succeeding tax years as follows.





A. A person entitled to a credit under this section for any taxable year may carry
over and apply to the tax liability for any one or more of the next succeeding 5 taxable
years the portion of any unused credits. [2001, c. 358, Pt. M, §4 (NEW); 2001, c. 358, Pt. M, §6 (AFF).]











B. Unused credits for which a person was eligible, but did not claim, for tax years
ending prior to January 1, 2001 may be carried forward and applied to the tax liability
for any one or more of the next succeeding 10 taxable years to the extent that those
credits relate to equipment that meets the definition of eligible equipment in effect
for tax years beginning on or after January 1, 2001. Credits carried forward that
are allowed to a person pursuant to this paragraph are limited to $100,000 per year,
except that if a person's investment credit base for any taxable year beginning on
or after January 1, 2001 is less than $100,000, the credit allowed under this paragraph
may be increased by an amount equal to the difference between $100,000 and the person's
investment credit base, provided that the credit allowed by this section may in no
event exceed $200,000. [2001, c. 358, Pt. M, §4 (NEW); 2001, c. 358, Pt. M, §6 (AFF).]








[
2001, c. 358, Pt. M, §6 (AFF);
2001, c. 358, Pt. M, §4 (RPR)
.]








6. Corporations filing combined return. 
In the case of corporations filing a combined return, a credit generated by an individual
member corporation under the provisions of this section must first be applied against
the tax liability attributable to that company under this Part. A member corporation
with an excess high-technology investment tax credit may apply its excess credit against
the tax liability of other group members to the extent that the other member corporations
can use additional credits under the limitations of subsection 4. Unused, unexpired
credits generated by a member corporation may be carried over from year to year by
the individual corporation that generated the credit, subject to the limitations in
subsection 5, and the rules set forth in this paragraph for applying the credit to
the tax liability of other group members are applicable in the years to which credits
are carried forward.


[
2001, c. 358, Pt. M, §5 (AMD);
2001, c. 358, Pt. M, §6 (AFF)
.]








7. Application. 
Except for the credit allowed with respect to the carry-over of unused credit amounts
pursuant to subsection 5, the tax credit allowed under this section does not apply
to tax years beginning on or after January 1, 2016.


[
2015, c. 267, Pt. DD, §28 (NEW)
.]





SECTION HISTORY

1997, c. 557, §B10 (NEW).
1997, c. 557, §§B14,G1 (AFF).
1997, c. 668, §§31-34 (AMD).
1997, c. 668, §42 (AFF).
1999, c. 414, §47 (AMD).
2001, c. 358, §§M1-5 (AMD).
2001, c. 358, §M6 (AFF).
2003, c. 673, §§G1,2 (AMD).
2003, c. 673, §G3 (AFF).
2015, c. 267, Pt. DD, §§27, 28 (AMD).