(1) Any taxpayer who makes expenditures in research and experimental activities, as defined in section 174 of the federal "Internal Revenue Code of 1986", as amended, which activities are conducted in an enterprise zone for the purpose of carrying out a trade or business, shall be allowed a credit against the income tax imposed by article 22 of this title as follows:(a) For income tax years commencing on or after January 1, 1989, an amount equal to three percent of the amount by which the amount expended for research and experimental activities in the enterprise zone in the income tax year of the taxpayer exceeds the taxpayer's average of the total actual expenditures for such purposes made in the same area as that which comprises the enterprise zone in the next preceding two income tax years.

(b) Repealed.

(2) Except as provided in section 24-46-104.3, in any one tax year, the amount of such credit allowable for deduction from the taxpayer's tax liability shall be the total of:

(a) Twenty-five percent of the total amount of such credit, with the balance carrying forward to the next tax year; and

(b) Any applicable carry forward amount, which amount shall be twenty-five percent of the original amount of such credit. The amount by which the credit allowed by subsection (1) of this section in any one taxable year exceeds the credit allowed to be deducted pursuant to paragraph (a) of this subsection (2) may be carried forward until the total amount of the credit is used.

(3) As used in this section, the term "expenditures in research and experimental activities" means expenditures made for such purposes, other than expenditures of moneys made available to the taxpayer pursuant to federal or state law, which are paid as expenses under the provisions of the federal "Internal Revenue Code of 1986", as amended.