Nonprofit fair associations

From the 2024 DOR Tax Exemption Study

The credit shall be calculated as follows: (a) Determine the greater of the amount of qualified research and development expenditures of a person or eighty percent of amounts received by a person other than a public educational or research institution in compensation for the conduct of qualified research and development; (b) subtract 0.92 percent of the person's taxable amount from the amount determined under (a) of this subsection; (c) multiply the amount determined under (b) of this subsection by the rate provided in RCW 82.04.260(3) in the case of a nonprofit corporation or nonprofit association engaging within this state in research and development, and the person's average tax rate for every other person. RCW 82.04.4452(2) and Rule 24003(19)(a) provide that the B&O tax credit for R&D activities is calculated by determining 80% of amounts received by the taxpayer in compensation for conducting qualified R&D and then subtracting 0.92 percent of the person’s taxable income from those amounts received, etc. The issue is whether, when calculating the R&D Credit based on 80% of the amounts received by the Taxpayer as compensation for conducting qualified R&D, the “amount received”