Pine Tree Development Zone Tax Credit Worksheet Instructions

2005

PINE TREE DEVELOPMENT ZONE

TAX CREDIT WORKSHEET INSTRUCTIONS

General Instructions

What is the Pine Tree Development Zone income tax credit? The credit is available to certain businesses

that expand or begin operations in a designated area of the state targeted for the need for economic growth. For

details about the program, visit:

Who must complete this worksheet? Corporate taxpayers claiming a Pine Tree Development Zone (“PTDZ”)

income tax credit must calculate the amount of the credit using this worksheet. Individual taxpayers claiming a

PTDZ credit from either a sole proprietorship or a pass-through entity (partnership, S corporation, etc.) must

calculate the amount of the credit using this worksheet and Worksheet PTE. This worksheet (and Worksheet

PTE, if required) must be attached to the taxpayer’s Maine income tax return along with a copy of the Pine Tree

Development Zone certificate issued by the Department of Economic and Community Development.

What does this worksheet do? This worksheet calculates the Pine Tree Development Zone apportionment

percentage for those entities that have qualified and non-qualified business activity. The worksheet also calculates

the application of the PTDZ income tax credit for all qualified businesses. Individuals claiming this credit must

also complete Worksheet PTE, which apportions the taxpayer’s income between business and nonbusiness

sources.

For more information about the Pine Tree Development Zone program and the related benefits, see Maine

Revenue Services guidance on the Pine Tree Development Zone income tax credit available at:

revenue/incomeestate/PTDZ.

Specific Instructions

Note: Individual taxpayers may skip lines 1 through 6 and enter the amount from Worksheet PTE, line

9 on line 7.

Line 1. Enter the value of qualified property located in a Pine Tree Development Zone. Qualified property used

in a qualified business includes all real and tangible personal property directly associated with the

qualified business activity and placed in service in a PTDZ after the entity becomes a certified PTDZ

business. Excluded from this amount is the value of property transferred by an affiliated business to a

PTDZ from a non-zone location in Maine. Property is valued at cost and is determined by averaging the

property owned or rented at the beginning and the end of the tax year.

Line 2. Enter the value of all property located in Maine and owned or rented by the entity or by affiliated businesses.

Line 3. Enter the compensation paid to new employees engaged in a qualified business activity in the Pine

Tree Development Zone. Compensation of employees transferred by the business or an affiliated

business to a PTDZ from elsewhere in Maine must be excluded from this line.

Line 4. Enter the compensation of all Maine employees of the business, including Maine employees of affiliated

businesses.

Line 7. Corporate taxpayers enter the result of line 5 divided by line 6. This is the ratio of qualified to non-

qualified business activity for the corporation. Individual taxpayers enter the amount from Worksheet

PTE, line 9. This is the ratio of qualified business activity to the taxpayer’s overall activity, including

nonbusiness income. For example, if an individual is claiming a PTDZ credit of 100%, but only 50% of

the taxpayer’s income is from the business, the taxpayer is only entitled to a credit against the tax

liability related to business income, or 50% of the total tax liability for the year.

Rev. 12.6.05

Pine Tree Development Zone Tax Credit Worksheet Instructions - 2005