Form 83 - Idaho Small Employer Investment Tax Credit

Instructions for Idaho Form 83

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08-02-11

GENERAL INSTRUCTIONS

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The portion of property used for personal use

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Used property in excess of $150,000

Form 83 is used to calculate the Idaho small employer

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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 are claiming the SE-ITC, you

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Property not used in Idaho, and

may not also claim the ITC on the same property.

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Vehicles under 8,000 pounds gross 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 will meet the tax incentive criteria at the project site

qualified investment for all such property using one of the

during the project period. If you have not filed Form 89SE with

following methods:

the Tax Commission, or you have been notified that you do not

qualify for the small employer incentives, you may not claim this

1. Percentage-of-Use Method - Multiply the investment in each

credit. If you do not qualify for the SE-ITC, you may be eligible to

asset by a fraction where Idaho use is the numerator and

claim the ITC. See Idaho Form 49.

total use is the denominator. Usage can be measured by

machine hours, mileage or any other method that accurately

QUALIFYING PROPERTY

reflects the usage.

If you are a qualifying taxpayer, property that would qualify for

2. Property Factor Numerator Method - Use the amount

the ITC qualifies for the SE-ITC. The property does not have to

included in the Idaho property numerator for each property.

be located at the project site to qualify. However, it does have to

CARRYOVER PERIODS

be 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

for which you are allowed the deduction for depreciation or

EXEMPTION AND FOREGO INVESTMENT TAX CREDIT

amortization in lieu of depreciation. Qualifying property includes

If you placed personal property in service that qualifies for the

the following property used in a trade or business:

ITC, you may elect to exempt this property from your property

tax. You are not eligible for the election if your rate of charge or

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Tangible personal property - machinery and equipment

rate of return is regulated or limited by federal or state law. The

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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 cannot

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

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Elevators and escalators

The election is available if you had negative Idaho taxable

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Single purpose agricultural or horticultural structures

income in the second preceding tax year from the tax year

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Qualified timber property

in which the property was placed in service. Negative Idaho

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Petroleum storage facilities

taxable income must have been computed without regard to any

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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 does not qualify includes:

of the election form must be attached to the original income tax

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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

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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. (Does not 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 fail to meet the tax incentive criteria you

coin-operated machines.

certified to on Idaho Form 89SE.

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The cost of property expensed under Section 179, IRC

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Property subject to 60-month amortization

File Form 83R if you claimed the SE-ITC. File Form 49R if you

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Used property not acquired by purchase

claimed the ITC or Form 49ER if you claimed the property tax

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Property that is either nondepreciable or has a useful life of

exemption.

fewer than three years

Form 83 - Idaho Small Employer Investment Tax Credit - 2011 Page 2

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