Instructions For Form 349 - Arizona Credit For Qualified Facilities

Arizona Form

2014 Credit for Qualified Facilities

349

The business must enter into a managed review with

CONTACTS FOR QUALIFIED FACILITY TAX

Commerce prior to applying for post-approval. The business

INCENTIVES PROGRAM

must obtain post-approval from Commerce prior to claiming

Arizona Commerce Authority

the credit. The first fifth of the apportioned credit is claimed

Application forms Program guidelines

on the tax return that includes the post-approval date.

Website:

For example, Company A, is a calendar year filer.

Program Manager

(602) 845-1200

Company A received pre-approval from Commerce for a

qualified facility on March 11, 2013, and received its post-

Arizona Department of Revenue

approval

March 14,

2014.

Because

Company A

Tax forms and instructions Information and assistance

completed everything necessary to earn the credit in

Website:

calendar year 2014, the first fifth of the credit must be

claimed on the tax return for calendar year 2014.

Taxpayer assistance

(602) 255-3381

From area codes 520 and 928, toll-free

(800) 352-4090

NOTE: Each fifth of the credit for qualified facilities must

be claimed on a timely filed original income tax return,

General Instructions

including extensions. The credit may not be claimed on an

amended return. Failing to claim the apportioned credit on

Arizona Revised Statutes (A.R.S.) §§ 43-1083.03 and

a timely filed return will result in loss of the apportioned

43-1164.04 provide refundable individual and corporate

credit for that taxable year.

income tax credits for expanding or locating a qualified

facility in this state. A “qualified facility” means a facility in

The amount of the credit for qualified facilities a taxpayer

this state that devotes at least 80% of the property and

may claim can never exceed the amount that is on the post-

payroll at the facility to one or more of the following: (a)

approval from Commerce.

qualified manufacturing, (b) qualified headquarters, or (c)

qualified research. The credit is effective for taxable years

NOTE: The business must submit a copy of the Certification

of Qualification (Certification) from Commerce with

beginning from and after December 31, 2012 through

Form 349 when claiming the credit.

December 31, 2019.

The credit is 10% of the lesser of (a) the taxpayer's total

Co-owners of a business, including partners in a partnership

capital investment in the qualified facility or (b) $200,000

and shareholders of an S corporation, may each claim only

for each net new full-time employment position at the

the pro rata share of the apportioned credit based on

qualified facility. The credit is apportioned and claimed in

ownership interest. The total of the apportioned credits

five equal annual installments in each of five consecutive

allowed to all such owners may not exceed the amount that

taxable years.

would have been allowed for a sole owner of the business.

The credit for qualified facilities is in lieu of the following

The credit is available to an exempt organization that is

credits, with respect to the same employment positions:

subject to corporate income tax on unrelated business



The credit for new employment, under A.R.S.

taxable income (UBTI). The credit must result from the

§§ 43-1074 or 43-1161 (claimed on Arizona Form 345);

activities that generate UBTI.



The military reuse zone credit, under A.R.S. §§ 43-1079

Credit Recapture

or 43-1167 (claimed on Arizona Form 306); and



The credit for renewable energy industry, under A.R.S.

During the pre-approval process with Commerce, the

§§ 43-1083.01 or 43-1164.01 (claimed on Arizona Form

applicant must consent to adjustment or recapture of the

342).

income tax credit in the case of noncompliance with A.R.S.

§ 41-1512.

In order to claim the credit for qualified facilities, a business

must apply for and receive pre-approval from the Arizona

If, within five taxable years after first receiving the credit for

Commerce Authority (Commerce). Commerce cannot pre-

qualified facilities, the Certification is rescinded by

approve income tax credits for any one taxpayer in excess of

Commerce, the taxpayer is disqualified from the apportioned

$30 million in any calendar year. Commerce cannot pre-

credits for subsequent taxable years and may be subject to

approve income tax credits in excess of $70 million annually

recapture.

between the credit for qualified facilities and the credit for

On a determination that the taxpayer has committed fraud or

renewable

energy

industry

provided

under

A.R.S.

relocated outside of this state within five taxable years of

§§ 41-1511, 43-1083.01 and 43-1164.01.

first receiving a credit, all credits previously allowed are

Once pre-approval is received, the business must incur at

subject to recapture.

least $250,000 in qualifying investment within 12 months of

The recapture of the credit is computed by increasing the

pre-approval.

amount of taxes imposed in the year following the year of

The tax year of pre-approval determines the "allocation

termination or revocation by the full amount of all credits

year." The allocation year is the calendar year to which the

previously allowed.

credit was applied to the annual credit cap.

Instructions For Form 349 - Arizona Credit For Qualified Facilities - 2014

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