Pine Tree Development Zone Tax Credit Worksheet

2011

PINE TREE DEVELOPMENT ZONE TAX CREDIT

WORKSHEET INSTRUCTIONS

There are two statewide PTDZ classiﬁ cations:

Tier 1: All areas of the state outside Cumberland and York counties plus high unemployment areas within Cumberland and

York counties. To qualify as a Tier 1 location, a municipality in Cumberland or York County must have an unemployment rate

that is 15% higher than the county’s labor market unemployment rate

for the calender year.

The beneﬁ t period is ten years.

Check the Tier 1 box on the worksheet if the qualiﬁ ed business activity has been certiﬁ ed by the Department of Economic

and Community Development (DECD) as occurring in a Tier 1 location. Also check the Tier 1 box if the qualiﬁ ed business

activity was certiﬁ ed by DECD prior to 2010. Otherwise, check the Tier 2 box.

Tier 2: All units of local goverment that are not classiﬁ ed for the Tier 1 designation. For Tier 2 locations, beneﬁ ts are limited

to 5 years.

General Instructions

What is the Pine Tree Development Zone income tax credit? The credit is available to certain businesses that expand or

begin operations in Maine. For Tier 1 qualiﬁ ed businesses, the credit allowed is up to100% of the Maine tax liability related

to qualiﬁ ed activity for the ﬁ rst ﬁ ve years and 50% of the tax liability for each of the years six through ten. For Tier 2 qualiﬁ ed

businesses, the credit allowed is 100% of the Maine tax liability related to qualiﬁ ed activity for the ﬁ rst ﬁ ve years. For details

about the program, visit:

Who must complete this worksheet? Corporate taxpayers (including insurance companies) claiming

Pine Tree

Development Zone (PTDZ) tax credits must calculate the credits using this worksheet. Individual taxpayers claiming a

PTDZ credit from either a sole proprietorship or a pass-through entity (partnership, S corporation, etc.) must calculate the

amount of the credit using this worksheet and Worksheet PTE. This worksheet (and Worksheet PTE, if required) must be

attached to the taxpayer’s Maine income tax return along with a copy of the Pine Tree Development Zone certiﬁ cate issued

by the Department of Economic and Community Development.

What does this worksheet do? This worksheet calculates the Pine Tree Development Zone apportionment percentage

for those entities that have qualiﬁ ed and non-qualiﬁ ed business activity. The worksheet also calculates the application of

the PTDZ tax credit for all qualiﬁ ed businesses. Individuals claiming this credit must also complete Worksheet PTE, which

apportions the taxpayer’s income between business and nonbusiness sources. Non-qualiﬁ ed business activity includes the

level of business activity in Maine that existed prior to PTDZ certiﬁ cation.

For more information about the Pine Tree Development Zone program and the related beneﬁ ts, see Maine Revenue Services

guidance on the Pine Tree Development Zone tax credit available at:

Speciﬁ c Instructions

Note: Individual taxpayers must skip lines 1 through 6 and enter the amount from Worksheet PTE, line 8 on line 7.

Line 1. Enter the value of qualiﬁ ed Pine Tree Development Zone property. Qualiﬁ ed property includes all real and tangible

personal property directly associated with the qualiﬁ ed business activity and placed in service in Maine after the

entity becomes a certiﬁ ed PTDZ business. Excluded from this amount is the value of property transferred by an

afﬁ liated business to a PTDZ business from elsewhere in Maine. Purchased property is valued at cost and rented

property is valued at eight times the annual rental rate. Total qualiﬁ ed property is determined by averaging the

property owned or rented at the beginning and the end of the tax year.

Line 2. Enter the value of all property located in Maine and owned or rented by the entity or by afﬁ liated businesses.

Line 3. Enter the compensation paid to new employees engaged in a qualiﬁ ed business activity. Compensation of

employees transferred by the business or an afﬁ liated business to a PTDZ business from elsewhere in Maine

must be excluded from this line. “New employee” means employees above the baseline, as established for the

Department of Economic and Community Development.

Line 4. Enter the compensation of all Maine employees of the business, including Maine employees of afﬁ liated

businesses.

Line 7. Corporate taxpayers (including insurance companies) enter the result of line 5 divided by line 6. This is the ratio of

qualiﬁ ed to non-qualiﬁ ed business activity for the corporation. Individual taxpayers enter the amount from Worksheet

PTE, line 8. This is the ratio of qualiﬁ ed business activity to the taxpayer’s overall activity, including nonbusiness

income. For example, if an individual is claiming a PTDZ credit of 100%, but only 50% of the taxpayer’s income is

from

qualiﬁ ed

business activity, the taxpayer is only entitled to a credit against the tax liability related to the qualiﬁ ed

business activitiy, or 50% of the total tax liability for the year.

Rev. 09/11

Pine Tree Development Zone Tax Credit Worksheet - 2011 Page 2

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