Form 306 - 2004 Military Reuse Zone Credit Instructions Page 6
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7Arizona Form 306
: In order for
Part VII - Partner's Share of Credit
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a partner of a partnership or an S corporation shareholder to
Lines 30 through 33 -
be eligible for a military reuse zone credit carryover, the
Single zone location: If the partnership has a single zone
business must remain in the military reuse zone. Therefore, a
location in a military reuse zone, the partnership must complete
partnership or an S corporation that passed the credit through
Form 306, Parts I through V. Then, complete Part VII, lines 30
to its partners or shareholders must furnish each partner or
through 33, separately for each partner. The partnership must
shareholder with a statement indicating that the business is
furnish each partner with a copy of the completed Form 306.
still located in the military reuse zone.
Each partner or S corporation shareholder must complete Part
306: If the partnership has
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VIII for the computation of the available carryover of the
multiple zone locations, it must complete an aggregate
credit passed through by the partnership or S corporation.
summary Form 306. Enter the taxpayer name and employer
identification number as shown on the tax return. Indicate the
Line 34 -
period covered by the taxable year (in an MM/DD/YYYY
Enter the applicable taxable year(s) in columns (a) through (e).
format). Enter “aggregate summary” at the top of page 1 of
Form 306. Complete Parts IV and V. Then, complete Part
Line 35 -
VII, lines 30 through 33, separately for each partner. The
In columns (a) through (e), enter the amount of the original
partnership must provide each partner a copy of the
tax credit earned for that taxable year.
completed aggregate summary Form 306 and the completed
Forms 306 for each zone location. The partnership does not
Line 36 -
have to provide each partner with a copy of the Forms 306-1,
In columns (a) through (e), enter the amount of the tax credit
306-2, 306-3 and 306-4.
for that taxable year which has been previously used.
Each partner must complete Parts VIII and IX.
Line 37 -
Part VIII - Available Credit Carryover
In columns (a) through (e), subtract the amount on line 36
306: Complete this section.
AGGREGATE SUMMARY FORM
from the amount on line 35. Enter the result in the applicable
[Exception: Partnerships and S corporations that elected to
columns on line 37. This is the tentative carryover.
pass the credit through to their shareholders do not complete
Line 38 -
this section on the aggregate summary Form 306.]
In columns (a) through (e), enter the amount of the credit
The business should complete Part VIII only if its allowable
which is unallowable because the business is no longer
military reuse zone tax credit for prior taxable years exceeded its
located in the military reuse zone or the military reuse zone
Arizona income tax liability for those taxable years.
has been terminated.
Since the first military reuse zone in Arizona (Williams Gateway
Line 39 -
Airport) was established on August 2, 1996, there is no
available carryover of this credit from taxable years ending prior
In columns (a) through (e), subtract the amount on line 38
to that date. The Williams Gateway Airport military reuse zone
from the amount on line 37. Enter the result in the applicable
was renewed for an additional five year period by the Governor
columns on line 39. This is the carryover available from prior
in Executive Order 2001-14. Since the second military reuse
taxable years.
zone in Arizona (Phoenix/Goodyear Airport) was established on
Line 40 -
December 10, 2002, there is no available carryover of this credit
Add the amounts in columns (a) through (e) on line 39. Enter
from taxable years ending prior to that date.
FOR THAT ZONE
the total in column (f) on line 40. This is the total military
NOTE: The business is allowed to carry forward the amount
reuse zone credit carryover for the current taxable year.
of the unused military reuse zone credit, for a period not to
Partners and S corporation shareholders:
exceed five taxable years, provided the business remains in
the military reuse zone. However, if the business relocates
A partner of a partnership or a shareholder of an S
outside of the military reuse zone or the military reuse zone is
corporation is eligible for a military reuse zone credit
terminated, the carryover of the tax credit is lost. If a portion
carryover, if the business remains in the military reuse zone.
of the business is moved outside of the military reuse zone,
Therefore, a partnership or an S corporation that passed the
the portion of the carryforward attributable to that portion of
credit through to its partners or shareholders must furnish
the business is lost.
each partner or shareholder with a statement indicating that
the business is still located in the military reuse zone.
Partners of a partnership or shareholders of an S corporation
should complete Part VIII only if their allowable military
Each partner or S corporation shareholder must complete Part
reuse zone tax credit for prior taxable years exceeded their
VIII for the computation of the available carryover of the
Arizona income tax liability for those taxable years.
credit passed through by the partnership or S corporation.
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