Arizona Form 307 - Recycling Equipment Credit Instructions

Arizona Form 307

S corporations must complete line 3. The S corporation must

line 2.

make an irrevocable election to either claim the credit or

S corporation shareholders - Enter the amount from Part II,

pass the credit through to its shareholders. The election

line 6.

statement must be signed by one of the officers of the S

Partners of a partnership - Enter the amount from Part III,

corporation who is also a signatory to the Form 120S.

line 9.

Lines 4 through 6 -

Line 27 -

If the S corporation elects to pass the credit through to its

Enter the amount of available credit carryover from Part IV,

shareholders, it must also complete lines 4 through 6.

line 25, column (d).

The S corporation must complete Part I. Then, complete Part

Line 28 -

II, lines 4 through 6, separately for each shareholder. The S

corporation must furnish each shareholder with a copy of the

Add lines 26 and 27. Enter the total here and on Form 300,

completed Form 307.

Part I, line 5, or Form 301, Part I, line 5.

If the S corporation passes the credit through to its

The entire amount of the unused credit shall be carried

shareholders, it must notify each shareholder of the

forward to the earliest of the taxable years to which the

shareholder's pro rata share of the adjustment to income

unused credit may be carried. Credits for a taxable year shall

required by the disallowance of depreciation or amortization

be applied in the following order:

of the recycling equipment for which the credit is claimed.

•

Unused credit carryovers.

Each shareholder must complete Part IV and Part V.

•

Current year credits.

Part III - Partner's Share of Credit

Part VI - Recapture of Recycling Equipment

Lines 7 through 9 -

Credit

The partnership must complete Part I. Then, complete Part

If recycling equipment for which a credit has been claimed

III, lines 7 through 9, separately for each partner. The

ceases to be recycling equipment or is transferred to another

partnership must furnish each partner with a copy of the

person during any taxable year, the tax imposed for that

completed Form 307.

taxable year shall be increased by the amount of the credit

claimed for the recycling equipment multiplied by the

Each partner must complete Part IV and Part V.

recapture percentage prescribed in the following instructions.

Part IV - Available Credit Carryover

A taxpayer shall not carry over any unused credit relating to

recycling equipment which ceases to be recycling equipment

NOTE: A taxpayer is allowed to carry forward the amount

or is transferred to another person.

of the unused recycling equipment credit for a period not to

exceed 15 taxable years, provided the equipment remains

Recycling equipment is in service, for determining the

recycling equipment and is not transferred to another

percent of credit recapture, from the time it is placed in

person. However, if any equipment for which the credit was

service until it ceases to be recycling equipment or is

claimed ceases to be recycling equipment or is transferred

transferred to another person. Refer to the table below for the

to another person, the carryover for that equipment is lost.

applicable percent of credit recapture.

Calculate the total available carryover of the recycling

Credit Recapture Percentage

equipment credit on page 2, Part IV, lines 10 through 25.

Less than 1 year

100% (1.00)

Complete these lines if the taxpayer claimed the credit on a

1 year or more, but less than 2 years

80% ( .80)

prior taxable year's tax return and had excess credit.

2 years or more, but less than 3 years

60% ( .60)

Enter the applicable taxable year(s) in column (a) of lines 10

3 years or more, but less than 4 years

40% ( .40)

through 24. Enter the original amount of recycling credit

4 years or more, but less than 5 years

20% ( .20)

available for the taxable year in column (b). Enter the

amount of credit previously used in column (c). Subtract

5 years or more

No recapture

column (c) from column (b) and enter the amount of the

Enter the total credit recapture from Part VI, line 33, on

credit available for carryover in column (d). Add the

Form 300, Part II, line 23, or Form 301, Part II, line 27.

amounts entered on lines 10 through 24, column (d). Enter

the total on line 25, column (d).

Part V - Total Available Credit

Line 26 -

Individuals and corporations (including S corporations that

elected to claim the credit) - Enter the amount from Part I,

Arizona Form 307 - Recycling Equipment Credit Instructions - 1999 Page 2

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