Form 83 - Idaho Small Employer Investment Tax Credit - 2015 Page 2
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3Instructions for Idaho Form 83
EFO00011p2
07-21-15
GENERAL INSTRUCTIONS
● The portion of property used for personal use
● Used property in excess of $150,000
Form 83 is used to calculate the Idaho small employer
● Horses
investment tax credit (SE-ITC) earned or allowed. Each member
of a unitary group of corporations that earns or is allowed the
Idaho Exceptions to IRC Sections 46 and 48
credit must complete a separate Form 83.
Idaho law specifically excludes the following property from
qualifying for the Idaho ITC:
The SE-ITC is allowed for property that qualifies for the 3%
investment tax credit (ITC). If you're claiming the SE-ITC, you
● Property not used in Idaho, and
can't claim the ITC on the same property.
● Vehicles under 8,000 pounds gross vehicle weight.
QUALIFYING TAXPAYERS
Property Used Both In and Outside Idaho
To qualify for the SE-ITC, you must certify by filing Form 89SE
If property is used both in and outside Idaho, compute the
that you'll meet the tax incentive criteria at the project site during
qualified investment for all such property using one of the
the project period. If you haven't filed Form 89SE with the Tax
following methods:
Commission, or you've been notified that you don't qualify for the
small employer incentives, you can't claim this credit. If you don't
1. Percentage-of-Use Method - Multiply the investment in
qualify for the SE-ITC, you may be eligible to claim the ITC. See
each asset by a fraction where Idaho use is the numerator
Idaho Form 49.
and total use is the denominator. Usage can be measured
by machine hours, mileage, or any other method that
QUALIFYING PROPERTY
accurately reflects the usage.
If you're a qualifying taxpayer, property that would qualify for the
2. Property Factor Numerator Method - Use the amount
ITC qualifies for the SE-ITC. The property doesn't have to be
included in the Idaho property numerator for each property.
located at the project site to qualify. However, it does have to be
CARRYOVER PERIODS
placed in service during the project period.
SE-ITC that was earned but not used against tax may be carried
Property that qualifies for the ITC generally follows the definition
forward for 14 tax years. For purposes of the carryover period, a
of qualified property found in the Internal Revenue Code (IRC),
short tax year counts as one tax year.
Sections 46 and 48 as in effect prior to 1986. The property
ELECTION TO CLAIM TWO-YEAR PROPERTY TAX
must have a useful life of three years or more and be property
EXEMPTION AND FORGO INVESTMENT TAX CREDIT
for which you are allowed the deduction for depreciation or
amortization in place of depreciation. Qualifying property
If you placed personal property in service that qualifies for the
includes the following property used in a trade or business:
ITC, you may elect to exempt this property from your property
tax. You aren't eligible for the election if your rate of charge or
● Tangible personal property - machinery and equipment
rate of return is regulated or limited by federal or state law. The
● Other tangible property - property used as an integral part of
exemption from the property tax is for two years. After the two
manufacturing, production, extraction, or furnishing transpor-
years, you must pay any applicable property tax. You can't
tation, communications, or utility services, or research facili-
claim the SE-ITC for any property that you elect to exempt from
ties and bulk storage facilities used in connection with those
property tax.
businesses
● Elevators and escalators
The election is available if you had negative Idaho taxable
● Single purpose agricultural or horticultural structures
income in the second preceding tax year from the tax year
● Qualified timber property
in which the property was placed in service. Negative Idaho
● Petroleum storage facilities
taxable income must have been computed without regard to any
● Qualified broadband equipment as approved by the Idaho
carryover or carryback of net operating losses.
Public Utilities Commission
The election must be made on Form 49E and filed with the
Nonqualifying Property
operator's statement or personal property declaration. A copy
Property that doesn't qualify includes:
of the election form must be attached to the original income tax
● Buildings and their structural components (this property may
return(s) for the tax year(s) in which the property was placed in
qualify for the small employer real property improvement tax
service.
credit - see Idaho Form 84)
RECAPTURE
● Property used in lodging facilities that rent 50% or more of
their lodging units for periods of 30 days or longer, such as
You must compute recapture if you sell or otherwise dispose of
apartment houses or rental homes. (Doesn't apply to hotels
the property or it ceases to qualify for the SE-ITC before it has
and motels that rent more than half their units for periods of
been in service for five full years.
less than 30 days.) Nonqualifying property includes property
used in the living quarters, lobby furniture, office equipment,
Also, you must compute recapture if you claimed the SE-ITC
and laundry and swimming pool facilities, but excludes certain
in an earlier year and didn't meet the tax incentive criteria you
coin-operated machines
certified to on Idaho Form 89SE.
● The cost of property expensed under IRC section 179
● Property subject to 60-month amortization
File Form 83R if you claimed the SE-ITC. File Form 49R if you
● Used property not acquired by purchase
claimed the ITC or Form 49ER if you claimed the property tax
● Property that is either nondepreciable or has a useful life of
exemption.
less than three years
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