Form Srdtc-1 - Strategic Research And Development Tax Credit (Page 3 of 6) in pdf

SCHEDULE WV/SRDTC-1

est

irginia

trategic

esearch and

eVelopment

redit

Information & Instructions

The Strategic Research and Development Tax credit was enacted to

within West Virginia, or ten percent [10.0%] of the excess of the

provide incentives to conduct qualified research and development

annual combined qualified research and development expenditure

activities within West Virginia.

within West Virginia over the base amount. The base amount

equals the average annual combined research and development

ELIGIBLE TAXPAYERS

expenditure within West Virginia during the three years preceding

the current year.

Eligibility for the Strategic Research and Development Tax Credit

is limited to the following taxpayers:

For a taxpayer that has filed a West Virginia Business Franchise

tax return for 1 or 2 prior taxable years (but fewer than 3 taxable

1. Taxpayers conducting qualified research and development

years), determined on the basis of all filings by the Taxpayer’s

activities within West Virginia who submitted a timely filed

controlled group, the base amount is the average annual combined

application for credit [WV/SRDTC-A] to the State Tax

qualified research and development expenditure for the number

Commissioner

of immediately preceding taxable years, other than short taxable

2. Taxpayers with qualified contract research and development

years, during which the taxpayer filed a West Virginia Business

expenditures allocated to West Virginia who submitted a

Franchise tax return.

timely-filed application for credit [WV/SRDTC-A] to the

For a Taxpayer that has not filed a West Virginia Business Franchise

State Tax Commissioner

tax return for at least 1 taxable year, determined on the basis of all

WHAT IS RESEARCH AND

filings by the taxpayer’s controlled group, the base amount is zero.

DEVELOPMENT?

QUALIFIED RESEARCH AND

Research and development means systematic scientific, engineering

DEVELOPMENT PROPERTY AND

or technological study and investigation in a field of knowledge in

the physical, computer or software sciences, often involving the

EXPENSES

formulation of hypotheses and experimentation, for the purpose of

Qualified research and development property means depreciable

revealing new facts, theories or principles, or increasing scientific

property purchased for the conduct of qualified research and

knowledge, which may reveal the basis for new or enhanced

development. Qualified research and development expenses means

products, equipment or manufacturing processes.

the sum of in-house and contract research and development

expenses for qualified research and development allocated to

Research and development includes, but is not limited to, design,

West Virginia, which are paid or incurred by the eligible Taxpayer

refinement and testing of prototypes of new or improved products,

during the taxable year. These expenses do not include any expense

or equipment, or design, refinement and testing of manufacturing

that must be capitalized and depreciated for federal income tax

processes before commercial sales relating thereto have begun.

purposes, or any expenditure paid or incurred for the purpose of

The term, commercial sales, includes, but is not limited to, sales of

ascertaining the existence, location, extent or quality of any deposit

prototypes or sales for market testing.

of coal, limestone or other natural resource, including oil and

Research and development does not include: market research;

natural gas. In addition, these expenses do not include any wage or

sales research; efficiency surveys; consumer surveys; product

salary expense for wages or salary reported on form W-2 for federal

market testing; product testing by product consumers or through

income tax purposes on which the West Virginia personal income

consumer surveys for evaluation of consumer product performance

tax is imposed, and against which tax the Strategic Research and

or consumer product usability; the ordinary testing or inspection

Development Tax Credit is applied.

of materials or products for quality control; management studies;

Property purchased for an eligible Strategic Research and

advertising; promotions; the acquisition of another’s patent, model,

Development Tax Credit is defined as buildings and improvements

production or process or investigation or evaluation of the value or

thereto, and tangible personal property, constructed or purchased

investment potential related thereto; research in connection with

for use as a component part of a qualified research and development

literary, historical or similar activities; research in social sciences,

project located within West Virginia on or after January 1, 2003.

economics, humanities or psychology and other non-technical

activities; and the providing of sales services or any other service,

Tangible personal property is included as qualified property only

whether technical service or non-technical service.

if depreciation, or amortization in lieu of depreciation, is allowable

in determining the income tax of the purchaser. The leasing of

AMOUNT OF CREDIT

property for a term of ten years or longer, if used as a component

The allowable tax credit is the greatest of three percent [3.0%] of the

part of an eligible research and development project shall also

annual combined qualified research and development expenditure

Rev. 9/12

Form Srdtc-1 - Strategic Research And Development Tax Credit Page 3

Related Articles

Related forms

Related Categories