Instructions For Form 5459 Draft - City Of Detroit Partnership Renaissance Zone Schedule - 2017
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2instr draft 01/25/17
instructions for Form 5459
City of Detroit Partnership Renaissance Zone Schedule
general information
Deductible income
Certain geographic areas within Detroit are designed as
A partnership may deduct that portion of its net income from
Renaissance Zones. This designation grants tax relief to
business activity within a Detroit Renaissance Zone. Business
qualified
partnership
located
and
conducting
business
activity consists of two components:
activity within a Detroit Renaissance Zone. In conjunction
• Adjusted ordinary business income; and
with the designation of these zones, the Detroit Income Tax
• Income not included in adjusted ordinary business income
Ordinance was amended effective January 1, 1997, to include a
(apportioned income).
Renaissance Zone deduction.
Business income from activity conducted within a Detroit
Claiming the Renaissance Zone Deduction
Renaissance Zone is determined via a two-factor Renaissance
Zone allocation formula. Income not included in adjusted
A partnership that is located and conducting business activity
ordinary business income (apportioned income) is apportioned
in a Detroit Renaissance Zone that files a Statement of
based upon situs of the income, the type of partner and/or
Eligibility with the City of Detroit, and obtains approval for
domicile of the individual resident or nonresident partner.
tax relief, is qualified to claim the deduction. If the partnership
Income used to calculate any other deduction allowed by the
elects to pay the tax for the partners, the deduction is claimed
income tax ordinance and income derived from illegal activity
on the City of Detroit Income Tax Partnership Return (Form
shall not be used to calculate this deduction.
5458). Otherwise, the deduction is passed through to the
partners who claim the deduction on their City of Detroit
Line-by-Line instructions
individual income tax return.
Lines not listed are explained on the form.
Deduction Disqualifiers
Complete the City of Detroit Income Tax Partnership Return
A partnership is not eligible to claim a Renaissance Zone
(Form 5458) through Schedule E before completing Form 5459.
deduction if the partnership:
Line 1: Enter the partnership’s name as shown on the City of
• Is delinquent in filing or paying any of the following
Detroit Income Tax Partnership Return (Form 5458).
state or local taxes: Michigan single business tax, Michigan
Line 2: Enter the partnership’s Federal Employer Identification
income tax, city income tax, Act 198 industrial abatement tax,
Number as shown on Form 5458.
commercial abatement tax, enterprise zone tax, city utility tax
or general property taxes on real or personal property.
Line 3: Enter the beginning date the partnership was qualified
• Owns residential rental property and did not file an affidavit
to claim the Detroit Renaissance Zone Deduction for the tax
with the Detroit City Treasurer’s Office by December 31 of
year.
the prior tax year attesting that the property is in substantial
Line 4: Enter the ending date the partnership was qualified to
compliance with all applicable state and local zoning, building
claim the Detroit Renaissance Zone Deduction for the tax year.
and housing laws or codes.
RenaiSSanCe Zone aPPoRtionment
• Is located within Detroit outside of a Renaissance zone
PeRCentage
and moves to a location within a renaissance zone in Detroit
without approval of the City.
The Renaissance Zone apportionment percentage is used
by partnerships located and doing business in Detroit in a
• Relocates more than 25 full-time equivalent jobs from one
Renaissance Zone and outside of the Renaissance Zones. The
or more non- Renaissance zone local governmental units (city,
average net book value of real and tangible personal property
village or township) and any of the local government units
may be determined by adding the net book value at the
from which a job was relocated adopts a resolution objecting
beginning of the year to the net book value at the end of the
to the relocation within 60 days of being notified of the job
year and dividing the sum by two.
relocation by the business.
Line 5a: Enter the average net book value of all real and
Qualification Date
tangible personal property owned and located in Detroit.
A partnership becomes a qualified taxpayer on the first day
Line 5b: Enter the gross annual rent, multiplied by 8, for all
after December 31, 1996, that the partnership is located and
rented real property located in Detroit.
conducting business activity in a Detroit Renaissance Zone.
The qualification continues until the partnership ceases to
Line 5d: Enter compensation paid to employees for work or
be located and conducting business activity in a Detroit
services performed within Detroit.
Renaissance Zone or until expiration of the Renaissance Zone
designation.
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