Looking for a North Carolina Tax Forms And Templates? Download it for free!

Page 2

General Information

NC-480

The information below does not cover all provisions of the law. For more information, go to the

Web

Department’s website, , and click on Business\Corporate Income and

11-04

Franchise Tax\Corporate Income\Guidelines for Article 3A Credits.

Application. To be eligible for a development zone project

United States. If the Department of Commerce determines

tax credit for qualifying contributions made in calendar year

that a development zone agency has used part or all of a

2004, a taxpayer must file this application with the

contribution for any purpose other than an improvement

Department of Revenue on or before April 15, 2005. If the

project, the Department of Commerce notifies the

taxpayer makes a written request for extension of time to file

Department of Revenue and the taxpayer who made the

this application, the due date for the application is extended

contribution of the forfeiture and of the amount forfeited.

until September 15, 2005. The written request for extension

of time must include the taxpayer’s name, social security

F .

Definitions. The following definitions apply:

number or federal identification number, and an authorized

signature. Send the request for an extension of time to file

Community development corporation - A nonprofit

the application to the Corporate, Excise, and Insurance Tax

corporation that meets all of the following conditions:

Division, P.O. Box 871, Raleigh, NC 27602-0871.

It is chartered pursuant to Chapter 55A of the North

An application for extension of time to file an income tax

Carolina General Statutes and is tax-exempt

return, Form D-410 or CD-419, does not extend the time

pursuant to IRC Section 501(c)(3).

for filing Form NC-480.

Its primary mission is to develop and improve low-

The tax credit may be taken for the tax year in which the

income communities and neighborhoods through

application is timely filed. Example 1. A calendar year

economic and related development.

corporation makes a qualifying contribution in November

2004 and timely files the application on April 15, 2005. The

Its activities and decisions are initiated, managed,

corporation may claim the tax credit on its 2005 tax return.

and controlled by the constituents of these local

Example 2. A fiscal year corporation with a tax year beginning

communities.

September 1, 2004 makes a qualifying contribution in

December 2004 and timely files the application on April 15,

Its primary function is to act as deal maker and

2005. The corporation may claim the tax credit on its 2004

packager of projects and activities that will increase

tax return since April 15, 2005 falls within the corporation’s

its constituency’s opportunities to become owners,

2004 tax year.

managers, and producers of small businesses, to

obtain affordable housing, and to obtain jobs

Limit. No credit is allowed for a contribution if the taxpayer

designed to produce positive cash flow and curb

has one of the relationships defined in IRC Section 267(b)

blight in the targeted community.

with the development zone agency or if the taxpayer controls,

is controlled by, or is under common control with an affiliate

Community development purpose - A purpose for

of the development zone agency. No credit is allowed if the

which a city is authorized to expend funds under North

taxpayer receives anything of value in exchange for the

Carolina General Statutes 160A-456, 160A-457, or

contribution. The credit is equal to 25% of the value of the

160A-457.2.

contribution but may not exceed fifty percent (50%) of the tax

against which it is claimed for the taxable year, reduced by

Control - A person controls an entity if the person owns,

the sum of all other credits allowed against that tax, except

directly or indirectly, more than ten percent (10%) of the

tax payments made by or on behalf of the taxpayer.

Any

voting securities of that entity.

unused credit may be carried forward for the next five

succeeding years. Any portion of the credit disallowed by

Development Zone Agency - Any of the following

the Department due to the annual ceiling on the credit (see

agencies that the Department of Commerce certifies

below) may not be carried forward.

will undertake an improvement project in a development

zone:

Ceiling. The total amount of all tax credits allowed for

development zone contributions in a calendar year may not

A community-based development organization

exceed $4,000,000. To apply this ceiling, the Department of

qualified under 24 C.F.R. Section 570.204 to receive

Revenue calculates the total credits from the applications

community development block grant funds.

filed. If the total amount of tax credits claimed for contributions

made in a calendar year exceeds $4,000,000, the

An agency designated as a community action

Department allocates the $4,000,000 among the applicants

agency pursuant to Section 210 of the Economic

for the credit by reducing each credit proportionately. The

Opportunity Act of 1964.

Department then sends a letter to each applicant (on or

before December 31 of the year following the calendar year

A community development corporation.

in which the investment was made) stating the amount of

credit the applicant may claim.

A community development financial institution

certified by the United States Department of

Certification. Development zone agencies and improvement

Treasury under the Community Development

projects must be certified with the Department of Commerce.

Banking and Financial Institutions Act of 1994.

Information on the qualifying conditions under which the

Department of Commerce certifies can be obtained from

A community housing development organization

the Department of Commerce.

qualified under the HOME Investment Partnership

Act.

Forfeiture. A taxpayer forfeits a credit allowed under this

section to the extent the development zone agency uses the

A local housing authority created under Article 1 of

taxpayer’s contribution for any purpose other than an

Chapter 157 of the North Carolina General Statutes.

improvement project. Each development zone agency

certified by the Department of Commerce must file with the

Improvement project - A project to construct or improve

Department of Commerce annual financial statements

real property for community development purposes or to

audited in accordance with generally accepted accounting

acquire real property and convert it for community

principles and in accordance with Government Audit

development purposes.

Standards developed by the Comptroller General of the

Nc-480 - Application For Tax Credit For A Development Zone Project - North Carolina Department Of Revenue - 2004 Page 2

Related Articles

Related forms

Related Categories