§ 38SS — Amount of credit for research and development costs under climatetech tax incentive program

[ Text of section added by 2024, 238, Sec. 212 effective November 20, 2024 for
tax years beginning on or after January 1, 2024. See 2024, 238, Sec. 325.]Section 38SS. (a) A taxpayer may, to the extent authorized pursuant to the
climatetech tax incentive program established in section 16 of chapter 23J, be
allowed a credit against its excise due under this chapter equal to the sum of 10
per cent of the excess, if any, of the qualified research expenses for the taxable
year, over the base amount, and 15 per cent of the basic research payments
determined pursuant to section 41(e)(1)(A) of the Internal Revenue Code;
provided, that the terms "qualified research expenses", "base amount", "qualified
organization base period amount", "basic research" and any other terms
affecting the calculation of the credit shall have the same meanings as defined in
said section 41 of said Code unless the context requires otherwise.
In determining the amount of the credit allowable under this section, the
commissioner of revenue may aggregate the activities of all corporations that
are members of a controlled group of corporations, as defined by 41(f)(1)(A) of
the Internal Revenue Code, and may aggregate the activities of all entities,
whether or not incorporated, that are under common control as defined in
section 41(f)(1)(B) of said Code.(b) For a qualified climatetech company, research and development costs,
within the meaning of section 41 of said Code, shall include those qualified research expenditures that are performed both inside and outside the commonwealth.(c) For purposes of section 30, the deduction from gross income that may be
taken with respect to any expenditures qualifying for a credit under said section
41 of the Internal Revenue Code shall be based upon its cost less the credit
allowable under this section; provided, however, that section 280C(c) of said
Code shall not apply.(d) The credit allowed hereunder for any taxable year shall not reduce the
excise to less than the amount due under subsection (b) of section 39, section 67
or any other general or special law.(e) The credit allowed under this section shall be limited to 100 per cent of a
corporation's first $25,000 of excise, as determined before the allowance of any
credits, plus 75 per cent of the corporation's excise, as so determined in excess
of $25,000. The commissioner of revenue shall promulgate regulations similar
to those authorized under section 38(c)(2)(B) of the Internal Revenue Code for
the purposes of apportioning the $25,000 amount among members of a controlled
group. Nothing in this section shall alter section 32C as it affects other
credits under this chapter.(f) If a corporation files a combined return of income under section 32B, a
credit generated by an individual member corporation under this section shall
first be applied against the excise attributable to that company under section 39,
subject to the limitations of subsections (d) and (e). A member corporation with
an excess research and development credit may apply its excess credit against
the excise of another group member if such other member corporation may use
additional credits under the limitations of said subsections (d) and (e). Unused
and unexpired credits generated by a member corporation shall be carried over
from year to year by the individual corporation that generated the credit and
shall not be refundable. Nothing in this section shall alter subsection (h) of
section 31A.(g) A corporation entitled to a credit under this section for a taxable year
may carry over and apply to its excise for any of the next succeeding 15 taxable
years that portion, as reduced from year to year, of its credit which exceeds its
excise for the taxable year. A corporation may carry over and apply to its
excise for any subsequent taxable year that portion, as reduced from year to
year, of those credits which were not allowed under subsection (f).(h) The commissioner of revenue shall promulgate regulations necessary to
carry out this section.