Enterprise Zone Tax Credit - Capital Investment Credit

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PLEASE NOTE THAT ALL APPLICATIONS ARE DUE 4 WEEKS PRIOR TO ANTICIPATED TAX FILING

The Enterprise Zone Tax Credit program is available to business entities located or expanding within a designated Enterprise Zone. Click the link to confirm your business entity falls within an Enterprise Zone for the applicable tax year. You may also confirm eligibility with your county, municipal or tribal economic development office, as well as GOED. The purpose of the tax credit is to encourage investment and job creation by rural Utah businesses.

This application covers the Private Capital Investment Tax Credit only. For the Employee Tax Credit Application please submit an application here. Business entities within a designated Enterprise Zone Area are eligible to submit both applications.

DO NOT claim any Enterprise Zone Tax credits on returns until the applicant receives the approval letter & certificate from GOED. A submission does not mean automatic approval. Submitting a tax return to the Tax Commission with the Enterprise Zone tax credit prior to GOED approval may lead to an audit by the Tax Commission.

ENTERPRISE ZONE TAX CREDITS:

Private Capital Investment Tax Credits:

1. A tax credit of 25% of the first $200,000 spent on rehabilitating a building in the enterprise zone that has been vacant for two years or more, including that the building has had or contained no occupants, tenants, furniture, or personal property in the time period immediately before the rehabilitation; and/or

2. An annual investment tax credit of 5% of the first $750,000 in qualifying investment in plant, equipment, or other depreciable property.

Instructions

Before filing a Building Rehabilitation Tax Credit application you will need the following documents:

• EZ Rehabilitation Investment Summary Template

• Current occupancy permit or certificate

• Notarized vacancy letter

• Documents showing current owner such as deed or mortgage documents

• Purchase and payment documentation demonstrating all rehabilitation expenses being claimed

• Signed letter of certification

Before filing a Qualifying Investment Tax Credit application you will need the following documents:

• EZ Annual Investment Summary Template

• Purchase and payment documentation demonstrating qualifying investment

• Signed letter of certification

Required Documentation

We require purchase documentation for all items being claimed for the private capital investment tax credit. For items equal to or greater than $10,000, we require both purchase and payment documentation. Please attach all documentation that substantiates the qualifying investments. The compliance team may request additional documentation if the documentation provided is deemed insufficient.

For more information refer to Enterprise Zone Statute and Enterprise Zone Administrative Rules.

Tax Credit Process:

1. To complete the application:

A. Carefully read each question and provide accurate answers.

B. Submit the required documentation to support your answers.

C. Fill out, sign, and submit a letter of certification which has been approved by the state as described in 63N-2-213 (2)(a).

2. Eligibility will be confirmed and reviewed by the GOED Compliance Team.

3. Dependent on eligibility, you will receive a tax credit certificate for qualifying expenditures. The Enterprise Zone Tax Credit is filed with your Utah State Income Tax.

4. If the amount of a tax credit under this section exceeds a business entity's tax liability under this chapter for a taxable year, the business entity may carry forward the amount of the tax credit exceeding the liability for a period that does not exceed three taxable years.

Please contact goedcompliance@utah.gov, with any questions or concerns regarding the Enterprise Zone program.

Capital Investment Form

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Please click, "Next Page" to continue.

Entity Eligibility Information

Carefully read each question and provide accurate answers.

Please identify the structure of the business entity

Under by which or by whom business is conducted or transacted. Estate means a nonresident estate or a resident estate that has state taxable income.

Under by which or by whom business is conducted or transacted. Trust means a nonresident trust or a resident trust that has state taxable income.

Please describe the purpose of the business entity.

Does the entity conduct business?

The claiming entity is not eligible for this credit. Application for tax credit will be denied as this criteria not met.

Did the claiming entity have operations within an Enterprise Zone during the applicable tax year for which at least 51% of the employees employed at the claimed facility reside in the county in which the enterprise zone is located or an enterprise zone that is immediately adjacent to the county that contains the enterprise zone in which the claimed facility is located?

Application for tax credit will be denied as this criteria not met.

Please describe the type of business the business entity conducts/transacts, if any.

The claiming entity is not eligible for this credit. Construction jobs are not eligible for the employment-related Enterprise Zone tax credits.

The claiming entity is not eligible for this credit. The business entity operating as a public utility may not claim any Enterprise Zone tax credits.

The claiming entity is not eligible for this credit. The business entity primarily engaged in retail may not claim any Enterprise Zone tax credits.

The claiming entity is not eligible for the employment-related tax credit. The business with no employees is not eligible for the employment-related Enterprise Zone tax credits.

The claiming entity may be eligible for this credit.

Has the business entity experienced any business closure in another Utah location during the claiming year? If so we will need additional information.

Except in a county of the first or second class, no Enterprise Zone tax credits are available to a business entity that closes or permanently curtails operations in another part of the state in connection with a transfer of any part of its business operations to an Enterprise Zone, if the closure or permanent curtailment is reasonably expected to diminish employment in that part of the state. Please provide additional information on the business closure experienced during the claiming year as it relates to this criteria.

Has and/or will the business entity claim a Targeted Business tax credit within the same tax year as the Enterprise Zone tax credit will be claimed?

The claiming entity is not eligible for this credit. A business entity may not claim or carry forward an Enterprise Zone tax credit for a taxable year during which the business entity has claimed the Targeted Business Income Tax Credit.

Page 3 - General Information

Input your business address and information below. Only business entities that have an operating address within an Enterprise Zone will qualify for Enterprise Zone Tax Credits. If the only connection to an Enterprise Zone is a P.O. Box or the provided business address is not in an Enterprise Zone, the application will be rejected.

Company Contact Information - All Questions are Required

1. Business Entity Name

This is the company name on your Utah state tax return. If you are claiming this credit on your individual income tax return please use your name here.

2. Applicant First Name

Business entity owner's first name.

3. Applicant Last Name

Business entity owner's first name.

4. Contact First Name

First name of the person completing this application on behalf of the applicant, such as a CPA.

5. Contact Last Name

Last name of the person completing this application on behalf of the applicant, such as a CPA.

6. Contact Phone

7. Contact Title

8. Contact Email

Please enter the email address where you would like to receive correspondence and the digital letter and/or certificate.

Company Specific Data - All Questions are Required

9. Primary NAICS Code - If you need assistance identifying your company’s NAICS code visit the NAICS Association, http://www.naics.com/search/

This code will determine if you are eligible for an Enterprise Zone tax credit in this application. A business entity primarily engaged in retail trade or a public utilities business may not claim an Enterprise Zone tax credit as per 63N-2-213 (10).

10. Company EIN

If you are claiming this credit on your individual income tax return please use your Social Security number here.

11. Is this a value-added agricultural company?

YesNoValue-added Agriculture: a change in the physical state or form of a product in a manner that enhances its value, thus expanding the customer base of the product. Examples include milling wheat into flour or making strawberries into jam.

If the claiming entity is an agricultural value-added business entity, please identify the applicable change in physical state or form of a product that enhances its value (e.g. milling wheat into flour, or making strawberries into jam)

12. What tax year are you submitting for?

14. What is the end date of the tax year you are submitting an application for?

Enterprise Zone Address

Please input your Enterprise Zone business address below. Addresses not located within an Enterprise Zone Area will be ineligible. Go here to verify that your operating address is in an Enterprise Zone. Please note that businesses located in Cache, Davis, Salt Lake, Tooele, Utah, Washington and Weber Counties are not eligible for a tax credit.

The Enterprise Zone Physical Address fields below are for the operating address of the business entity within the Enterprise Zone Area.

15. Enterprise Zone Business Street Address

16. Enterprise Zone Business City

17. Enterprise Zone Business State

18. Enterprise Zone Business ZIP

19. Enterprise Zone Business County

Page 4 - Private Capital Investment

Please complete this section to be eligible for a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the enterprise zone that has been vacant for two years or more including that the building has had or contained no occupants, tenants, furniture, or personal property in the time period immediately before the rehabilitation.

If you are not submitting for a building rehabilitation credit, please skip this section.

Rehabilitated Building Address

Please input the exact rehabilitated building address. Addresses not located within an Enterprise Zone Area will be ineligible for the Enterprise Zone tax credit. Go here to verify that your operating address is in an Enterprise Zone.

1. Rehabilitated Building Street Address

3. Rehabilitated Building City

4. Rehabilitated Building State

5. Rehabilitated Building ZIP

Rehabilitated Building Investment Details

6. Current Owner of the Building

7. Date the building was last occupied

8. Current city occupancy permit issued date

9. Total Rehabilitation Expenditure

The dollar amount your company has invested in the building.

Investment is determined by each purchase document. For example, an invoice with several items totaling less than $10,000 is acceptable as the only backup documentation provided. An invoice with several items equal to greater than $10,000 requires purchase and payment documentation.

For the purchase of an investment below $10,000

For each investment being claimed, purchase documentation is required.

For the purchase of an investment equal to or greater than $10,000

Both purchase and payment documentation is required.

10. Please open the following attachment, fill in the information pertinent to your claim and reattach completed form when uploading required documentation. Building Rehabilitation Investment Template

11. Upload backup documentation for the rehabilitation expenses that increases the real property value. To aid processing, please scan all supporting documents into one PDF. For investment in a building rehabilitation provide the following; proof of ownership such as deed or mortgage documents and a recent property tax notice. (Purchase and payment documentation of all rehabilitation expenses totaling the amount that the tax credit is calculated from.)

The expenditure input in Question 9 should be detailed in the purchase and payment documentation attached here.

Upload additional documentation as needed.

The expenditure input in Question 9 should be detailed in the purchase and payment documentation attached here.

12. Upload current city, county, or tribal occupancy permit.

13. Notarized letter provided by city, county, tribal or local rural development contact confirming the vacancy length before the building rehabilitation occurred. This credit requires that a building be vacant for at least two years prior to current occupancy, including that the building has had or contained no occupants, tenants, furniture, or personal property in the time period period immediately before the rehabilitation.

Page 5 - Private Capital Investment

Qualified private capital investment made during a tax period may qualify for a tax credit of 5% of the first $750,000 qualifying investment in plant, equipment, or other depreciable property within the enterprise zone area for that tax period as described in Administrative Rule R357-15 and 63N-2-218 (7)(f).

If the amount of a tax credit under this section exceeds a business entity's tax liability for a taxable year, the business entity may carry forward the amount of the tax credit exceeding the liability for a period that does not exceed the next three taxable years.

If you are not submitting for a qualifying investment credit, please skip this section.

Property Investment Required Documentation

Investment is determined by each purchase document. For example, an invoice with several items totaling less than $10,000 is acceptable as the only backup documentation provided. An invoice with several items equal to greater than $10,000 requires purchase and payment documentation.

For the purchase of an investment below $10,000

For each investment being claimed, purchase documentation is required.

For the purchase of an investment equal to or greater than $10,000

Both purchase and payment documentation is required.

As per Rule R357-15-2 (7) "Purchase documentation" means

(a) bill of sale;

(b) contract of sale;

(c) receipt, invoice:

(d) settlement statement or disclosure document issued from a third party source, including a title company or a bank, for property or other real estate investments; or

(e) other documentation which identifies the buyer, seller, purchase price, item(s) purchased, and the date of purchase.

As per Rule R357-15-2 (6) "Payment documentation" means

(a) bank statement;

(b) cleared check;

(c) signed and executed financing agreement;

(d) signed statement from the seller confirming the payer, payee, date paid, and amount paid for cash payments; or

(e) settlement statement or disclosure document issued from a third party source, including a title company or bank, for property or other real estate investments.

1. Total Property Investment

Provide the dollar amount of property investment eligible to be claimed.

2. Please open the following attachment, fill in the information pertinent to your claim and reattach completed form when uploading required documentation. Qualifying Investment Template

3. Attach all documentation that substantiate qualifying investments. To aid processing, please scan all supporting documents into one PDF.

The amount in Question 1 should be demonstrated by the attached purchase and payment documentation.

Upload additional documentation as needed.

The amount in Question 1 should be demonstrated by the attached purchase and payment documentation.

Page 6 - Submission and Compliance

Each Enterprise Zone applicant is required to sign a letter of certification which has been approved by the state (as described in 63N-2-213 (2)(a)). Please print a letter of certification , complete form, sign, and attach below.

Please certify below that the data you submitted is accurate and that you understand it will be tested for validity. GOED staff or staff from the Utah State Tax Commission may contact you for further documentation if needed to verify claims made in this submission.

I confirm that all data submitted is accurate and may be tested for validity.

Please certify below that you understand that it is illegal under UCA 63N-2-213 (5) for a business entity to claim a tax credit without receiving a tax credit certificate from GOED.

I confirm that I need to receive a tax credit certificate before claiming the amount on a tax return

Check this box if you are also submitting an Enterprise Zone Employee Credit application in addition to the Capital Investment Credit application.

I am submitting an Enterprise Zone Employee Credit application

Please click the Submit button below to submit this application.

Our staff will review your application and contact you soon. If approved, a form will be issued to file with your taxes.

If you would like to confirm receipt of your application, please email goedcompliance@utah.gov within a week of submission. Please be aware that it takes our office up to 30 days to process a submitted application.