PUBLIC LAW 97-34—AUG. 13, 1981
95 STAT. 241
(c) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 48 note. apply to uses after July 29, 1980, in taxable years ending after such date.
Subtitle C—Incentives for Research and Experimentation SEC. 221. CREDIT FOR INCREASING RESEARCH ACTIVITIES. (a) GENERAL RULE.—Subpart A of part IV of subchapter
A of chapter 1 (relating to credits allowable) is amended by inserting after section 44E the following new section: "SEC. 44F. CREDIT FOR INCREASING RESEARCH ACTIVITIES.
"(a) GENERAL RULE.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 25 percent of the excess (if any) of— "(1) the qualified research expenses for the taxable year, over "(2) the base period research expenses. "(b) QUALIFIED RESEARCH EXPENSES.—For purposes of this section— "(1) QUALIFIED RESEARCH EXPENSES.—The term 'qualified research expenses' means the sum of the following amounts which are paid or incurred by the taxpayer during the taxable year in carrying on any trade or business of the taxpayer— "(A) in-house research expenses, and "(B) contract research expenses. "(2) IN-HOUSE RESEARCH EXPENSES.—
"(A) IN GENERAL.—The term *in-house research expenses' means— "(i) any w ^ e s paid or incurred to an employee for qualified services performed by such employee, "(ii) any amount paid or incurred for supplies used in the conduct of qualified research, and "(iii) any amount paid or incurred to another person for the right to use personal property in the conduct of qualified research. "(B) QUALIFIED SERVICES.—The term 'qualified services' means services consisting of— "(i) engaging in qualified research, or "(ii) engaging in the direct supervision or direct support of research activities which constitute qualified research. If substantially all of the services performed by an individual for the taxpayer during the taxable year consists of services meeting the requirements of clause (i) or (ii), the term 'qualified services' means all of the services performed by such individual for the taxpayer during the taxable year. "(C) SuppuES.—The term 'supplies' means any tangible property other than— "(i) land or improvements to land, and "(ii) property of a character subject to the allowance for depreciation. "(D) WAGES.—
"(i) IN GENERAL.—The term 'wages' has the meaning given such term by section 3401(a).
26 USC 44F.
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