Research and Experimental Credit Extension and Reform Act of 1988

Research and Experimental Credit Extension and Reform Act of 1988 - Amends the Internal Revenue Code to make permanent the income tax credit for qualified research expenditures by repealing the provisions that would terminate the credit for expenses incurred or paid after 1988.

Revises the method for computing: (1) base period research expenses, adding a factor reflecting the gross national product growth rate; and (2) the tax credit, adding an alternative computation component.

Applies the credit to in-house research expenses that the taxpayer pays or incurs for the principal purpose of using the research results in the active conduct of a future trade or business.