Page:United States Statutes at Large Volume 103 Part 3.djvu/255

 PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2323 (A) by striking "December 31, 1989" each place it appears and inserting "December 31, 1990", and (B) by striking "January 1, 1990" each place it appears and inserting "January 1, 1991". (2) SPECIAL RULES.— 26 USC 4i note. (A) In the case of any taxable year which b^ins before October 1, 1990, and ends after September 30, 1990, the amount treated as the qualified research expenses for such taxable year for purposes of section 41 of the Internal Revenue Code of 1986 shall be the amount which bears the same ratio to the amount which would have been deter- mined for such taxable year without r^ard to this subpara- graph as the number of days in such taxable year before October 1, 1990, bears to the total number of days in such taxable year before January 1, 1991. (B) In the case of a taxable year described in subpara- ^^ graph (A), paragraph (2) of section 41(h) of such Code, as so redesignated, shall be applied by substituting "October 1, 1990" for "January 1, 1991" each place it appears and by substituting "September 30, 1990" for "December 31, 1990'\ (3) CONFORMING AMENDMENT. — Subparagraph (D) of section 28(b)(l) is amended by striking "December 31, 1989" and insert- ing "December 31, 1990". (b) CHANGES IN COMPUTATION OF INCREMENTAL CREDIT. — (1) IN GENERAL.—Subsection (c) of section 41 is amended to read as follows: "(c) BASE AMOUNT.— "(1) IN GENERAL.—The term 'base amount' means the product of— "(A) the fixed-base percentage, and "(B) the average annual gross receipts of the taxpayer for the 4 taxable years preceding the taxable year for which the credit is being determined (hereinafter in this subsec- tion referred to as the 'credit year'). "(2) MINIMUM BASE AMOUNT. —In no event shall the base amount be less than 50 percent of the qualified research ex- penses for the credit year. "(3) FIXED-BASE PERCENTAGE.— "(A) IN GENERAL. —Except as otherwise provided in this paragraph, the fixed-base percentage is the percentage which the aggregate qusdined research expenses of the taxpayer for taxable years beginning after December 31, 1983, and before January 1, 1989, is of the aggregate gross receipts of the taxpayerforsuch taxable years. "(B) START-UP COMPANIES.— "(i) TAXPAYERS TO WHICH SUBPARAGRAPH APPLIES.— The fixed-base percentage shall be determined under this subparagraph if there are fewer than 3 taxable years beginning after December 31, 1983, and before January 1, 1989, in which the taxpayer had both gross receipts and qualified research escpenses. "(ii) FIXED-BASE PERCENTAGE.—In a case to which this subparagraph applies, the fixed-base percentage is 3 percent. "(iii) TREATMENT OF DE MiNnas AMOUNTS OF GROSS RECEIPTS AND QUALIFIED RESEARCH EXPENSES.— The Sec- retary may prescribe regulations providing that de

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