Which states offer R&D Tax Credits?

The definition of qualifying research activities in each state is based on the federal tax credit regulations; however, the calculation methodology varies significantly from state to state. For example:

• Some states provide a refund or exchange of unused R&D Tax Credits, so that even if a taxpayer has no tax liability it can still derive a cash benefit.
• The R&D Tax Credits in some states have not been permanently adopted, and may expire in the future.
• Most states require that the research activities must be conducted within their borders to qualify.
• Some states do not offer the alternative simplified credit calculation.
• In some states, basic research payments made to universities and certain non-profit organizations can be included in the calculations.
  

There are 38 states that currently allow taxpayers to claim the R&D Tax Credit. Below is the list of states that DO NOT offer the R&D Tax Credit:

• District of Columbia
• Missouri
• Mississippi
• Montana
• Nevada
• Oklahoma
• Oregon
• South Dakota
• Tennessee
• Washington
• West Virginia
• Wyoming

Refer to our state pages for state-specific information.