Schedule I-Epp - Industrial Expansion Or Revitalization Credit - Electric Power Producers

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Sch. I-EPP
SCHEDULE I-EPP
Rev. 1/06
INDUSTRIAL EXPANSION OR REVITALIZATION CREDIT – ELECTRIC POWER PRODUCERS
The purpose of the Industrial Expansion or Revitalization Credit is to encourage the establishment of new industry, the expansion of existing industry,
and the growth and revitalization of industrial facilities in West Virginia.
TAXPAYERS ELIGIBLE FOR INDUSTRIAL EXPANSION OR REVITALIZATION TAX CREDIT
1.
New Entitlement – Only electric power producers may earn new (or additional) Industrial Expansion and Revitalization Tax Credit attributable
to qualified investment placed in use or service after December 31, 2002. Electric power producers should use Schedule I-EPP to report
qualified investment and calculate and claim the Industrial Expansion and Revitalization Tax Credit.
2.
Preexisting credit entitlement is preserved – Manufacturers that are entitled to the Industrial Expansion and Revitalization Tax Credit
attributable to qualified investment placed in service or use prior to January 1, 2003, may continue to apply and utilize the credit until the
original ten-year entitlement has been exhausted or otherwise terminated. Taxpayers entitled to such credit would include electric power
producers, manufacturers who produce their own goods, and contract manufacturers (who produce goods for others which they do not own).
Food processors are not classified as manufacturers for purposes of this pre - 1/1/03 credit entitlement. Taxpayers entitled to pre - 1/1/03
credit other than electric power producers, should use Schedule I to claim their Industrial Expansion and Revitalization Tax Credit. Electric
power producers entitled to pre - 1/1/03 credit, should use Schedule I-EPP to claim their Industrial Expansion and Revitalization Tax Credit.
AMOUNT OF CREDIT
The tax credit shall be limited to 10% (1% for each of ten consecutive years) of the total qualified investment for industrial expansion or revitalization.
The amount of credit employed in any given year shall not reduce the taxpayer’s Business and Occupation Tax (§11-13) and Business Franchise Tax
(§11-23) liability by more than 50%. Any unused credit for a particular year is forfeited.
PROPERTY PURCHASED FOR INDUSTRIAL EXPANSION OR REVITALIZATION
Property purchased for industrial expansion or revitalization is defined as all real property and improvements thereto and new tangible personal property,
but only if such property is constructed or purchased for use as a component part of a new, expanded, or ongoing industrial facility of an industrial
taxpayer. Tangible personal property is included within the above definition only if depreciation or amortization, in lieu of depreciation, is allowable in
determining federal personal or corporation net income tax. The property must have a useful life of four years or more. Useful life is defined as the
period over which the asset may reasonably be expected to be useful in the taxpayer’s business.
LEASING OF PROPERTY
The leasing of property for a term of ten years or longer, if used as a component part of a new, expanded, or ongoing industrial facility is considered
property purchased for industrial expansion or revitalization. Lease renewals, subleases or assignments shall not be considered, however.
INELIGIBLE PROPERTY
Property purchased for industrial expansion or revitalization does not include the following:
1.
Motor vehicles licensed by the Department of Motor Vehicles;
2.
Airplanes;
3.
Off-premise transportation equipment;
4.
Property located or primarily used outside of West Virginia;
5.
Property acquired incident to the purchase of the stock or assets of an industrial taxpayer which was or had been used by the seller in his
industrial business in West Virginia, or which has been previously designated property purchased for industrial expansion or property
purchased for industrial revitalization or property purchased for eligible research and development projects and used to qualify for the
credit for industrial expansion. Property which has been previously designated as qualified property placed in service for the Business
Investment and Jobs Expansion Credit is likewise disqualified.
6.
Property purchased for industrial revitalization prior to July 1, 1981.
7.
Property not directly attributable to the industrial expansion.
NET COST
Net Cost is the net monetary consideration provided for acquisition of title and/or ownership to the subject property. Net cost shall not include the value
of any property given in trade or exchange for such new property purchased for industrial expansion.
If property is damaged or destroyed by fire, flood, storm or other casualty, or is stolen, then the cost of replacement property does not include any
insurance proceeds received in compensation for the loss.
In the case of leased property acquired for a period of ten years or longer, net cost shall be the rent reserved for the primary term of the lease, not to
exceed 20 years. Lease renewals, subleases or assignments shall not be considered.

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