Business assets; research or experimental expenditures; deduction; authorized; rules and regulations

(b) Internal Revenue Code means the Internal Revenue Code of 1986, as amended;

(c) Qualified improvement property has the same meaning as in section 168(e)(6) of the Internal Revenue Code and shall apply to property placed in service after December 31, 2024;

(d) Qualified property has the same meaning as in section 168(k) of the Internal Revenue Code and shall apply to property placed in service after December 31, 2024; and

(e) Research or experimental expenditures has the same meaning as in 26 C.F.R. 1.174-2.

(2)(a) For taxable years beginning or deemed to begin on or after January 1, 2025, the cost of expenditures for business assets that are qualified property or qualified improvement property covered under section 168 of the Internal Revenue Code shall be eligible for full expensing and may be deducted as an expense incurred by the taxpayer during the taxable year during which the property is placed in service, notwithstanding any changes to federal law related to depreciation of property beginning January 1, 2023, or on any other date. Such deduction shall be allowed only to the extent that such cost has not already been deducted in determining federal adjusted gross income or, for corporations and fiduciaries, federal taxable income.

(b) If the taxpayer does not fully expense the costs described in this subsection in the taxable year in which the property is placed in service, the taxpayer may elect to depreciate the costs over a five-year irrevocable term.

(3)(a) For taxable years beginning or deemed to begin on or after January 1, 2025, a taxpayer may elect to treat research or experimental expenditures which are paid or incurred by the taxpayer during the taxable year in connection with the taxpayer's trade or business as expenses which are not chargeable to the capital account. The expenditures so treated shall be allowed as a deduction, notwithstanding any changes to the Internal Revenue Code related to the amortization of such research or experimental expenditures. Such deduction shall be allowed only to the extent that such research or experimental expenditures have not already been deducted in determining federal adjusted gross income or, for corporations and fiduciaries, federal taxable income.

(b) If the taxpayer does not fully deduct the research or experimental expenditures in the taxable year in which the expenditures are paid or incurred, the taxpayer may elect to amortize the expenditures over a five-year irrevocable term.

(4) If a deduction under this section is for a corporation having an election in effect under subchapter S of the Internal Revenue Code, a cooperative corporation, a partnership, a limited liability company, an estate, or a trust, the deduction may be claimed by the shareholders, patrons, partners, members, or beneficiaries in the same manner as those shareholders, patrons, partners, members, or beneficiaries account for their proportionate shares of the income or losses of the corporation, cooperative corporation, partnership, limited liability company, estate, or trust.

(5) The Department of Revenue may adopt and promulgate rules and regulations to implement this section.