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North Dakota Office of State Tax Commissioner

2003 Schedule RZ instructions

Zone project

•

their respective interests in the entity. The

Description of the tax incentive(s)

A zone project is a transaction in a zone

credits under the Act may not be passed

allowed for the project. (This does not

that is approved by both the local zone

through to the owners of a pass-through

include any property tax incentives

authority and the North Dakota Commerce

entity that is subject to the North Dakota

which are determined at the local

Department’s Division of Community

financial institution tax.

government level.)

Services. A taxpayer must apply to the

•

The starting date of the 5-year

Pass-through member notice

local zone authority for approval of a

exemption or credit period, if

A pass-through entity must provide each of

transaction as a zone project. In general,

applicable.

its owners with a notice informing them

eligible transactions include the purchase,

about the pass-through of an income

The information in the final zone project

lease, or rehabilitation of residential or

exemption or a tax credit. The notice must

approval level is important to the proper

commercial real property in a zone. The

be provided to them on or before the due

completion of Schedule RZ. A copy of the

eligible transactions differ for each tax

date (or extended due date) of the pass-

final zone project approval letter must be

incentive, so it is important to know which

through entity’s North Dakota tax return.

attached to the North Dakota tax return

transactions are required to qualify for a

In the case of a pass-through entity that is

along with Schedule RZ. If you did not

particular tax incentive. See the

subject to the North Dakota financial

receive a copy of the final approval letter,

instructions for Parts 1 through 5 of this

institution tax under N.D.C.C. ch. 57-35.3

contact your local zone authority.

booklet for the qualifying transactions for

(Form 35 filer), this applies only if the

each tax incentive.

Prior to the issuance of the final zone

entity qualifies for a business or

project approval letter, the Division of

Local zone authority. For more

investment income exemption under the

Community Services will issue a

information on applying for a zone project,

Act.

preliminary letter. The purpose of this

contact the local zone authority for the

The notice must contain the following:

letter is to allow the taxpayer to proceed

zone in which the project will be located.

•

The heading: Renaissance Zone Pass-

with the purchase, lease, or rehabilitation

Division of Community Services

Through Member Notice.

work. The final zone project approval

The North Dakota Commerce

•

letter is issued only after the Division of

The statement: This notice contains

Department’s Division of Community

Community Services determines that the

information that is important to the

Services is responsible for administering

project has satisfied the criteria for

preparation of your North Dakota tax

the Act’s provisions covering the

eligibility.

return. For instructions on how to

establishment and operation of a zone,

report this information on your North

including the review and approval of zone

Pass-through entity. In the case of a

Dakota return, obtain Schedule RZ

projects. For more information on North

partnership, S corporation, or other pass-

from the North Dakota Office of State

Dakota renaissance zones and zone

through entity, the copy of the approval

Tax Commissioner. Attach a copy of

projects, contact the Division of

letter must be attached to the pass-through

this notice to your North Dakota tax

Community Services as follows:

entity’s tax return. The owners of the pass-

return.

through entity do not attach a copy of the

Call

•

If applicable, the zone project number.

approval letter to their North Dakota tax

(701) 328-2094

•

Name, address, and federal employer

returns.

Write

identification number (FEIN) of the

Pass-through entity

ND Commerce Department

pass-through entity.

Division of Community Services

•

Tax year of the pass-through entity to

If the taxpayer is a partnership, S

PO Box 2057

corporation, or other pass-through entity,

which the income exemption or tax

Bismarck, ND 58502-2057

the amount of the exemption or credit must

credit relates.

be determined at the pass-through entity

•

Web site

Name and social security number (or

level and passed through to the owners in

FEIN) of the owner.

proportion to their respective interests in

•

Owner’s share of the income exemption

Zone project approval letter

the entity. In the case of a partnership or S

or tax credit. If the pass-through entity

corporation, do not report the exemption

Upon final approval of a zone project, the

qualified for more than one of the Act’s

or credit on the North Dakota Form 58 or

North Dakota Commerce Department’s

income or financial institution tax

Form 60.

Division of Community Services will issue

incentives, show them separately on the

a final zone project approval letter to the

notice. For this purpose, use the

In the case of a pass-through entity that is

local zone authority. Among other things,

following descriptions:

subject to the North Dakota financial

the letter will include the following:

® Business or investment income

institution tax under N.D.C.C. ch. 57-35.3

•

Project number assigned to the project

(Form 35 filer), the business or investment

exemption

® Historic property preservation or

by the local zone authority.

income exemption under the Act is claimed

as a deduction on the entity’s North

renovation tax credit

Dakota return (Form 35) and passed

® Renaissance fund organization

through to the owners in proportion to

investment tax credit

Log - Schedule Rz Instructions Renaissance Zone Act Exemptions And Tax Credits - North Dakota Office Of State Tax Commissioner - 2003 Page 4

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