This bill proposes to increase the aggregate value of research and development (R&D) tax credits that can be claimed by taxpayers. Specifically, it raises the cap on the total amount of tax credits issued by the commissioner from $7,000,000 to $10,000,000 for any fiscal year. Additionally, the maximum credit amount that an entity can claim is increased from $50,000 to $100,000. These changes are set to take effect on July 1, 2026.

The fiscal impact of this bill is expected to result in a decrease in revenue for the Business Enterprise Tax (BET) and Business Profits Tax (BPT) by an indeterminable amount, with a maximum potential decrease of $3,000,000 in the first year if the full amount of the tax credit increase is claimed. The Department of Revenue Administration will need to update tax return forms and electronic systems to accommodate these changes, but it does not anticipate any additional costs beyond its operating budget.

Statutes affected:
Introduced: 77-A:5
HB1102 text: 77-A:5