INVESTMENT TAX CREDIT

Production property, industrial waste treatment facilities, and air pollution control facilities, and research and development property acquired or built in an EZ may qualify for the EZ Investment Tax Credit (EZ-ITC) of 10% for business corporations (Article 9-A) or 8% for personal income tax (Article 22). However, this credit cannot reduce the franchise tax due from business corporations for any year to less than the higher of the tax on the minimum taxable income base or the fixed dollar minimum. For franchise tax and personal income tax, any amount of the credit that cannot be used in a given year may be carried forward to the following year or years until used up. A new business may elect to treat 50% of the EZ-ITC carryover as an overpayment in the year in which the credit was allowed and have the overpayment refunded or credited to any outstanding tax liability. This credit does not apply to property leased by a taxpayer to someone else. 

Example 2:
Wonder Widget Works, Inc. (Wonder), which has met all the criteria for claiming the Empire Zone Investment Tax Credit (EZ-ITC), is expanding its operations in an EZ in 1994. Its new facility will cost $1,000,000 to build, and the necessary machinery and equipment will cost another $500,000. Wonder's EZ investment tax credit for 1994 is as follows:

• Building cost $1,000,000
• Machinery and equipment cost $500,000
• Total investment $1,500,000
• EZ-ITC (10% for 1994) $150,000