NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Expenditure Decreases)

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to SB25,SB42, SB43,HB52

SOURCES OF INFORMATION

Taxation and Revenue Department

SUMMARY

Synopsis of Bill

Endorsed by the Economic and Rural Development and Telecommunications Committee. Authorizes two credits, each equal to 5% of qualified expenditures, for research and development firms. These credits are doubled if the firm is located in a rural area. Eligible expenditures are based on purchase price or "reasonable value" of the equipment at time of installation. The credits can be rolled over.

The first credit, the "basic credit", can be applied against gross receipts, compensating and withholding taxes. The second credit, the "additional credit", would be available if payroll increases by at least $50,000 for every $1,000,000 of expenditure claimed and can be taken against personal or corporate income taxes. The effective date of the bill would be July 1, 2000.

Significant Issues

Analysis assumes Sandia National Laboratories would not qualify.

FISCAL IMPLICATIONS

Taxation and Revenue Department estimates recurring revenue loss to the General Fund is estimated at $16,000 in FY01 and $18,000 for a full year.

ADMINISTRATIVE IMPLICATIONS

TRD notes some additional systems costs as well increased audit and compliance costs.

AW/njw