Businesses that incur qualified research and development expenses for cellulosic ethanol technology in Maryland are entitled to a tax credit. The total credits for all businesses may not exceed $250,000 per year.
This credit is available for tax years beginning after December 31, 2007, but before January 1, 2017.
The credit may be taken against corporate income tax or personal income tax. Sole proprietorships, corporations and pass through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
To qualify for the credit:
The business must invest in research and development activities in Maryland related to cellulosic ethanol technology, which is technology that is used to develop cellulosic biomass for conversion to ethanol fuel. The business must also submit an application for the credit to the Maryland Department of Commerce (DOC) by September 15 of the calendar year following the end of the tax year in which the qualified research and development expenses were paid or incurred. DOC will certify the amount of the allowable credit to the business by December 15.
How the credit is calculated:
The amount of the tax credit is equal to 10% of the qualified research and development expenses paid or incurred during the tax year.
DOC may not approve more than $250,000 in credits for any calendar year. If the aggregate amount of credits applied for exceeds $250,000, each applicant will receive a prorated share of the total credit amount.
If the credit is more than the state tax liability, the unused credit may be carried forward for the next 15 years.
For taxable years beginning after December 31, 2012, this credit is available only with an electronically-filed amended income tax return for the tax year in which the qualified R&D expenses were paid or incurred. A copy of the certification issued by DOC must be included with the electronic return, and the Form 500CR section of the return must be completed.
Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 East Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-7234 or 1-877-821-0099