Form Int-2 - Report Of Investment In Project For Income Tax Capital Credit Page 2

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Instructions for Preparing

Report of Investment in Project for Income Tax Capital Credit

(Form INT-2)

GENERAL INSTRUCTIONS

Title 40, Chapter 18, Articles 7 and 9, Code of Alabama 1975 provide for an annual capital cost credit against Alabama income tax liability generat-

ed by or arising out of a qualifying project in the amount of five percent of capital costs for 20 years, beginning in the year the qualifying project is placed

in service. For certain qualifying projects, the credit can be applied against the financial institution excise tax generated by or arising out of a qualifying

project.

This form is to serve as the written statement of the actual investment (capital costs) in a project in accordance with the provisions of Section 40-18-

190 et seq. and Section 40-18-240 et seq., and should be filed when these costs are known and after the project is placed in service. The forms sub-

mitted by the project entity will constitute a filing on behalf of all shareholders, partners, members, owners, or beneficiaries of the investing company(ies)

entitled to the capital credit.

If you have any questions pertaining to the administration of this form or related to the capital credit in general, please contact the Alabama

Department of Revenue at (334) 242-1175. Mail this completed form to: Alabama Department of Revenue, ATTN: Capital Credit Program Admin-

istrator, P.O. Box 327001, Montgomery, AL 36132-7001.

STATUTORY REQUIREMENTS FOR QUALIFYING PROJECTS

Industrial, Warehousing or Research Activity Project. A project at which the predominant trade or business activity conducted will constitute indus-

trial, warehousing, or research activity, with capital costs not less than $2,000,000. The project must create a minimum of 20 jobs for new employees and

the average hourly wage of all new employees at the project must not be less than the base wage requirement. If the project is located in a Favored Geo-

graphic Area, capital costs are not less than $500,000, minimum job creation is five (5) and the project is subject to a lower base wage requirement.

Industrial, warehousing, or research activity is defined in Section 40-18-190(a)(8) as any trade or business in the 2007 North American Industrial Clas-

sification System (NAICS), promulgated by the Executive Office of the President of the United States, Office of Management and Budget as: Sectors 31

(except National Industry 311811), 32, and 33, Subsectors 423, 424, 511 and 927, Industry Groups 2121, 5417, 5415, and 5182, Industries 11331 and

48691, National Industries 115111, 517110, 541380, and 561422 (in bound call centers only). Also included is any process or treatment facility which

recycles, reclaims, or converts materials, which include solids, liquids, or gases, to a reusable product.

Small Business Addition Project. A project at which the predominant trade or business activity conducted will constitute industrial, warehousing,

or research activity as defined in Section 40-18-190(a)(8), with capital costs not less than $1,000,000. The project must create a minimum of 15 jobs for

new employees and the average hourly wage of all new employees at the project must not be less than the base wage requirement. A small business

addition is an addition to an existing facility, to be used as a part of any existing facility of a business located in the state that, prior to the date on which

the addition is placed in service, had 100 or fewer full-time employees.

Headquarters Facility Project. A project described in the 2007 North American Industrial Classification System (NAICS) National Industry 551114,

with capital costs not less than $2,000,000. The project must create a minimum of 50 jobs for new employees and the average hourly wage of all new

employees at the project must not be less than the base wage requirement. Headquarters facility projects do not have Favored Geographic Area status.

Data Processing Center Project. An establishment engaged in the provision of complete processing and specialized reports from data, the provi-

sion of automated data processing and data entry services, the provision of an infrastructure for hosting or data processing services, the provision of spe-

cialized hosting activities, the provision of application service provisioning, the provision of general time-share mainframe facilities, or some combination

of the foregoing, without regard to whether any other activities are conducted at the establishment, with capital costs not less than $2,000,000. The pro-

ject must create a minimum of 20 jobs for new employees and the average hourly wage of all new employees at the project must not be less than the

base wage requirement. If the project is located in a Favored Geographic Area, capital costs are not less than $500,000, minimum job creation is five (5)

and the project is subject to a lower base wage requirement.

Research & Development Facility Project. An establishment engaged in conducting original investigations undertaken on a systematic basis to

gain new knowledge and/or applying research findings or other scientific knowledge to create new or significantly improved products or processes, with

capital costs not less than $2,000,000. The project must create a minimum of 20 jobs for new employees and the average hourly wage of all new employ-

ees at the project must not be less than the base wage requirement. If the project is located in a Favored Geographic Area, capital costs are not less than

$500,000, minimum job creation is five (5) and the project is subject to a lower base wage requirement.

Renewable Energy Facility Project. Any plant, property, or facility that either 1) produces electricity or natural gas, in whole or in part, from biofu-

els as such term is defined in Section 2-2-90(c)(2) or from renewable energy resources as such term is defined in Section 40-18-1(30) with the excep-

tion that hydropower production shall be excluded from such definition; or 2) produces biofuel as such term is defined in Section 2-2-90(c)(2), with capi-

tal costs not less than $2,000,000. The project must create a minimum of 20 jobs for new employees and the average hourly wage of all new employees

at the project must not be less than the base wage requirement. If the project is located in a Favored Geographic Area, capital costs are not less than

$500,000, minimum job creation is five (5) and the project is subject to a lower base wage requirement.

Warehousing or Storage Activity Project. A project falling within Subsector 493 of the 2007 North American Industry Classification System, where

the project will provide logistics services related to the distribution of goods, with capital costs not less than $5,000,000. The project must create a min-

imum of 50 jobs for new employees and the average hourly wage of all new employees at the project must not be less than the base wage requirement.

If the project is located in a Favored Geographic Area, capital costs are not less than $1,000,000 and the project is subject to a lower base wage require-

ment.

Tourism Destination Attraction Project. A project as defined in Section 40-18-190(a)(19), with capital costs not less than $20,000,000. The pro-

ject must create a minimum of 50 jobs for new employees and the average hourly wage of all new employees at the project must not be less than the

base wage requirement. If the project is located in a Favored Geographic Area, capital costs are not less than $5,000,000, minimum job creation is 20

and the project is subject to a lower base wage requirement.

Alternative Energy Resources Electricity Production Project. A project owned by a utility described in Section 37-4-1(7)a, Code of Alabama 1975,

or owned by an investing company which is itself owned by a utility, at which the predominant trade or business activity conducted will be the production

of electricity from alternative energy resources as defined in Section 40-18-1(2) Code of Alabama 1975, with capital costs not less than $100,000,000.