Enterprise Zone Tax Credits
The Enterprise Zone Tax Credit is an incentive program that awards tax credits to private companies that invest in rehabilitating, expanding or improving buildings or land located within designated Enterprise Zones.
The tax credit equals 25% of amount invested or up to $500,000 in tax credits per project. Projects must meet the following criteria:
· Private company must make a qualified investment in areas which have been designated as an Enterprise Zone. These qualified investments must be approved by the DCED.
· Application must include a commitment to avoid displacement of current residents
· Application must include a support letter from the local Enterprise Zone coordinator
· Eligible costs include construction related costs as well as engineering, architecture, invoiced expenditures and acquisition.
Selling Enterprise Zone Tax Credits
The Enterprise Zone tax credits are transferable and can be sold after a 1 year waiting period. A business can sell these tax credits once their tax return is filed for the tax year in which the credits were issued.
For the buyers of Enterprise Zone tax credits, liabilities can be offset by 100% using the tax credits. The applicable taxes for purchasers include: PIT, CNI, CS/FF, Bank Shares, Title Ins & Trust Co., Shares Tax, Insurance Premiums and Mutual Thrift.