Cellulosic Ethanol Technology Research and Development Tax Credit (CETR&D)

​CETR&D provides an income tax credit for costs incurred by Maryland businesses for qualified cellulosic ethanol technology research and development expenses. To be qualified to receive the CETR&D tax credit, a business must apply to, and be certified by the Department of Business and Economic Development (DBED). The credit is available for taxable years beginning after December 31, 2007 but before January 1, 2017. 

BENEFITS

A business may be qualified for a tax credit against the Maryland income tax in amount equal to 10% of the Maryland qualified research and development expenses paid or incurred by the business during the taxable year.

ELIGIBILITY

To qualify for receiving CETR&D tax credit, the business must incur "Qualified Maryland Research and Development expenses", which are the expenses paid or incurred for CETR&D that is conducted in Maryland. "Cellulosic ethanol technology" is defined as technology that used to develop cellulosic biomass for conversion to ethanol fuel.

APPLY

For a business to claim a tax credit, it must apply to and be certified by DBED. The business must submit an application to DBED by September 15th following the tax year in which the expenses are incurred. By December 15th of that year, DBED will certify the approved amount of credit. The applicant will be required to file an amended Maryland income tax return to claim the credit and attach a copy of DBED certification.

The total CETR&D tax credit approved by DBED may not exceed $250,000 for any calendar year. If the total amount of credits applied for by all businesses exceeds $250,000, the credits will be approved on a pro-rata basis. 

If the tax credits exceed the state tax liability, the unused credit may be carried forward for the next 15 year. The credits may not be used against prior year's tax liabilities.

Tax Year 2013 applications must be sent to DBED and postmarked by September 15, 2014.

CETR&D Tax Credit Materials
Application form for Calendar Year 2013

RESOURCES

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CONTACT

For more information about CETR&D contact:   

Stacy Kubofcik, Tax Specialist
DBED, Office of Finance Programs
SKubofcik@choosemaryland.org  
(410) 767-4980
(877) 821-0099

Mark A. Vulcan, Director, Tax Incentives
DBED, Office of Finance Programs
MVulcan@choosemaryland.org
(410) 767-6438
(877) 821-0099

FREQUENTLY ASKED QUESTIONS

 
  • What is the Maryland Cellulosic Ethanol Technology Research and Development (CETR&D) Tax Credit?
    • ​It is an income tax credit to individuals or businesses that invest in cellulosic ethanol technology. The total amount of credits depends on the amount of eligible expenses incurred with a limit of $250,000 for all businesses that apply.

  • What is “cellulosic ethanol technology”?
    • ​It is defined as technology that is used to develop cellulosic biomass for conversion to ethanol fuel.

  • How do I qualify for the Maryland CETR&D tax credit?
    • ​Certification Requirement: A business entity must submit an application to the Department of Business and Economic Development (DBED) by September 15th of the calendar year following the taxable year in which the qualified research and development expenses in cellulosic ethanol technology were paid or incurred. DBED will certify to the taxpayer the amount of tax credit that the taxpayer may claim by December 15th of the same year.

      A business entity may only claim a credit for expenses incurred for qualified research and development expenses. “Qualified Research and Development Expenses” is defined as expenses paid or incurred for cellulosic ethanol technology research and development that is conducted in Maryland.

  • How is the credit calculated?
    • ​The credit is 10 percent of the “qualified research and development expenses” paid or incurred by an individual or corporation during the previous tax year.

  • How do I claim the Maryland CETR&D tax credit?
    • ​The business entity shall file an amended income tax return for the taxable year in which the qualified research and development expenses were paid or incurred and attach a copy of DBED’s certification of the approved credit amount.

  • What if I do not have enough income tax liability to use all the credit?
    • ​If the tax credit exceeds the tax imposed for that year, the credit may be applied against following years’ taxes until the credit is used or 15 years have passed since the Maryland qualified R&D expense was incurred. The credit may not be used against prior years’ tax liabilities.

  • What if the total amount of tax credits that businesses apply for exceeds the program cap of $250,000?
    • ​If applications by all firms for the tax credit exceed $250,000, the credit amount will be calculated by multiplying the credit applied for by the following fraction: $250,000 divided by the total value of credits applied for by all applicants. For example, if the credit amount that you are applying for is $100,000 and the total amount of credits applied for by all businesses is $500,000, you will be eligible for $50,000 tax credit.

  • What if the business entity has several subsidiaries conducting cellulosic ethanol technology R&D in Maryland?
    • ​Only the parent company will apply for the CETR&D credit. Each subsidiary will be allocated a fraction of the total credits for use against its Maryland tax liability. The fraction is the Maryland
      qualified R&D expenses incurred by the separate entity divided by the total Maryland qualified R&D expenses incurred by all affiliated corporations and entities under common control.