Form 312 Instructions - Agricultural Water Conservation System Credit

Arizona Form

1999 Agricultural Water Conservation System Credit

312

MM/DD/YYYY format). Attach the completed form to the

Obtain additional information or assistance, tax forms and

tax return.

instructions, and copies of tax rulings and tax procedures by

contacting one of the numbers listed below:

All returns, statements, and other documents filed with the

department require a taxpayer identification number (TIN).

Phoenix

(602) 255-3381

The TIN for a corporation, S corporation, or a partnership is

Nationwide, toll-free

(800) 352-4090

the taxpayer's federal employer identification number. The

Form Orders

(602) 542-4260

TIN for an individual is the taxpayer's social security number

Forms by Fax

(602) 542-3756

or an IRS individual taxpayer identification number.

Recorded Tax Information

Taxpayers that fail to include their TIN may be subject to a

Phoenix

(602) 542-1991

penalty.

Other Arizona areas, toll-free

(800) 845-8192

Hearing impaired TDD user

Part I - Qualifying Water Conservation System

Phoenix

(602) 542-4021

Lines 1 through 3 -

Other Arizona areas, toll-free

(800) 397-0256

On lines 1 through 3, enter the information relating to the

Obtain tax rulings, tax procedures, tax forms and

water conservation system purchased and installed for which

instructions, and other tax information by accessing the

the credit is being claimed.

department's Internet home page at:

If the system is not one of the systems or system changes

listed, check the "other" box. Give a detailed description of

General Instructions

the system and an explanation of how it qualifies for the

credit.

ARS §§ 43-1084 and 43-1172 provide a tax credit for the

Part II - Calculation of the Current Taxable

purchase

and

installation

agricultural

water

Year's Credit

conservation system. The credit is equal to 75 percent of the

qualifying expenses incurred during the taxable year.

Line 4 -

To Qualify for the Credit:

Enter the total amount of expenses relating to the water

•

conservation system spent in the current taxable year.

The system must be primarily designed to substantially

conserve water on land that the taxpayer or taxpayer's

Line 5 -

tenant uses to:

Enter the amount of any reimbursement received for

produce crops, fruits, or other agricultural products;

expenses relating to the water conservation system.

Part III - S Corporation Credit Election and

raise, harvest, or grow trees; or

Shareholder's Share of Credit

sustain livestock.

Line 8 - S Corporation Credit Election

•

The expense must be consistent with a conservation plan

S corporations must complete line 8. The S corporation must

that the taxpayer has filed and that is in effect with the

make an irrevocable election to either claim the credit or

United

States

Department

Agriculture

Soil

pass the credit through to its shareholders. One of the

Conservation Service.

officers of the S corporation who is also a signatory to the

If the allowable tax credit exceeds the taxes otherwise due on

Form 120S must sign this election.

the claimant's income or if there are no taxes due, the

Lines 9 through 11 -

taxpayer may carry the unused credit forward for a period

not to exceed the next five taxable years.

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

shareholders, it must also complete lines 9 through 11.

Co-owners of a business may each claim only a pro rata

share of the credit allowed based on their ownership interest.

The S corporation must complete Parts I and II of Form 312.

Co-owners of a business include partners in a partnership

Then, complete Part III, lines 9 through 11, separately for

and shareholders of an S corporation as defined in section

each shareholder. The S corporation must furnish each

1361 of the Internal Revenue Code. The total of the credits

shareholder with a copy of the completed Form 312.

allowed all owners may not exceed the amount that would

If the S corporation passes this credit through to its

have been allowed for a sole owner of the business.

shareholders, it must notify each shareholder of the

shareholder's pro rata share of the adjustment to income

Line-by-Line Instructions

required by the disallowance of the expenses for which the

Type or print the required information in the name and

credit is claimed.

taxpayer identification number section at the top of the form.

Each shareholder must complete Parts V and VI.

Indicate the period covered by the taxable year (in an

Form 312 Instructions - Agricultural Water Conservation System Credit - 1999

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