Fillable Form Montana Rcyl - Recycle Credit/deduction

Definitions

Recycling machinery and/or equipment must be

“Collect” is the collection and delivery of reclaimed

located and operating in Montana on the last day of

materials to a recycling or reclaimable materials

the taxable year for which the credit is claimed. The

processing facility.

machinery or equipment must be used to collect,

“Machinery or equipment” is property having a

process, separate, modify, convert or treat solid

depreciable life of more than one year. The

waste into a product that can be used in place of a

machinery or equipment collects or processes

raw material for productive use or to treat soils

reclaimable material or is used in the manufacturing

contaminated by hazardous wastes. This does not

of a product from reclaimed material.

include transportation equipment unless it is

“Reclaimable material” is material that has useful

specialized to the point that it can only be used to

physical or chemical properties after serving a

collect and process reclaimable material.

specific purpose and that is normally disposed of as

solid waste by a consumer, processor or

The owners of a small business corporation or

manufacturer. Material may not be considered

partnership must prorate the credit in the same

reclaimed by the consumer, processor or

proportion as their ownership in the business unless

manufacturer that generated the material.

an agreement states otherwise.

“Recycled material” is a substance that is produced

from reclaimed material. Reclaimed material

collected, processed or used to manufacture a

Only a taxpayer that owns an interest either directly

product may not be an industrial waste generated

or through a pass-through entity such as a

by the person claiming the tax credit.

partnership or S. corporation and is operating the

equipment as the primary user on the last business

day of the year may claim the credit.

Instructions For Recycling Credit

This credit is available to certain C. corporations, S.

corporations, partnerships and individuals that

The credit is limited to the the amount of the

qualify.

taxpayer’s income or corporation tax liability. Any

excess credit resulting from a sale or lease when

The tax credit is available only for the procurement

the overriding purpose of the transaction is not to

of machinery and/or equipment that is depreciable

collect or process reclaimable material or

(Defined in IRS Code Section 167). The machinery

manufacture a product from reclaimed material.

and/or equipment must be used in Montana;

primarily for the collection or processing of

The Department of Revenue may disallow a credit

reclaimable material or in the manufacturing of

resulting from a sale or lease when the overriding

finished products from reclaimed material or to treat

purpose of the transaction is not to collect or

soils contaminated by hazardous wastes.

process reclaimable material or manufacture a

product from reclaimed material.

The basis for the credit is generally the cost of the

property before consideration of trade-in

equipment. An exception to this is the basis shall

Instructions for Recycling Deduction

be reduced by any trade-in upon which this credit

A taxpayer may deduct an additional amount equal

has previously been taken. This includes the

to 10% of the taxpayer’s expenditures for the

purchase price, transportation cost (if paid by the

purchase of recycled material that was otherwise

purchaser) and the installation cost before

deductible by the taxpayer as business-related

depreciation or other reductions. This credit does

expense in Montana.

not increase or decrease the basis for tax

purposes.

Mail to: Montana Department of Revenue, PO Box 5805, Helena, MT 59604-5805

Questions? Please call (406) 444-6900 or TDD (406) 444-2830 for hearing impaired.

Form Montana Rcyl - Recycle Credit/deduction - 2004 Page 2

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