§ 44-31-1.1. Biotechnology investment tax credit.
(a) Any company primarily engaged in commercial biological research and development or
manufacturing and sale of biotechnology products or active pharmaceutical ingredients
which pays its employees that work a minimum of thirty (30) hours per week within
the state a median annual wage equal or greater than one hundred and twenty-five percent
(125%) of the average annual wage paid by all employers in the state to employees
that work a minimum of thirty (30) hours per week within the state, and provides benefits
typical to the biotechnology industry, shall be allowed a credit of ten percent (10%)
of the cost or other basis for federal tax purposes of tangible personal property
and other tangible property, including buildings and structural components of buildings
acquired, constructed, reconstructed, or leased with situs in Rhode Island and principally
used in the production of biotechnology products after December 31, 2001.
(1) "Biotechnology products� means those products that are applicable to the prevention,
treatment, or cure of a disease or condition of human beings, and that are produced
using living organisms, or materials derived from living organisms, or cellular, sub
cellular, or molecular component of living organisms.
(2) "Principally� means the company's sales of biotechnology products or costs related
to the development of biotechnology products constitute at least fifty percent of
its overall receipts or its overall costs respectively.
(3) "Tangible personal property� and "other tangible property� includes buildings and
structural components of buildings acquired, constructed, reconstructed, or leased
with situs in Rhode Island and principally used in the production of biotechnology
products after December 31, 2001 that:
(A) is depreciable pursuant to 26 USC. Section 167,
(B) has a useful life of four (4) years or more, and
(C) is acquired by purchase as defined in 26 U.S.C. § 179(d), or
(D) is acquired by lease based on the fair market value of the property at the inception
of the lease times the portion of the depreciable life of the property represented
by the term of the lease, excluding renewal options, for a term of twenty (20) years;
and
(E) does not include vehicles or furniture.
(4) "Wages� means all remuneration paid for personal services, including commissions and
bonuses and the cash value of all remuneration paid in any medium other than cash
and all other remuneration which is defined as taxable wages by the Internal Revenue
Service, as certified by the department of labor and training.
(b) If the amount of credit allowable for any taxable year is less than the amount of
credit available to the taxpayer, any amount of credit not used in the taxable year
will be available the following year or years not to exceed fifteen (15) years and
may be deducted from the taxpayer's tax for the year or years.
(1) The credit may be extended beyond seven (7) years only in a year in which:
(A) The company maintains an average quarterly number of employees for each calendar year
that is nine and one half percent (9.5%) greater than average quarter number of employees
in the fourth year of the initial credit. Employees are defined as those that work
a minimum of thirty (30) hours per week within the state with benefits typical to
the biotechnology industry;
(B) The company's average quarterly median wage is not less than the company's average
of its quarterly median wage for the three (3) previous calendar years;
(C) The company pays its employees a median annual wage equal or greater than one hundred
and twenty-five percent (125%) of the average annual wage paid by all employers in
the state. Employees are defined as those that work a minimum of thirty (30) hours
per week within the state with benefits typical to the biotechnology industry; and
(D) The department of labor and training certifies to the tax administrator that the criteria
in (A) — (C) have been met.
(2) Unused credits after the seventh year are forfeited permanently if any of these wage
and employment criteria are unmet after the seventh year.
(3) The company may determine the order in which the credits generated in different tax
years are utilized, provided that credits available for more than seven (7) years
may not reduce current year liability by more than seventy-five percent (75%); and
provided further that in no event, can liability be reduced below the minimum tax
prescribed in § 44-11-2.