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G. Records and documentation <br />· Taxpayer must maintain and make available for inspection any records the <br /> Secretary of Revenue determines necessary to verify amount of credit taxpayer is <br /> entitled to <br />· Commerce must report annually number of applications received, number and <br /> enterprise tier of new jobs credits applied for, and cost of machinery and equipment <br /> credits applied for <br /> <br />H. Designation of Tiers <br />· Commerce ranks counties annually and assigns enterprise factor based on <br /> unemployment rate, population growth, and per capita income <br />· Five tiers: Tier one is 10 with highest enterprise factor, Tier two is next 15, Tier <br /> Three is next 25, Tier 4 is next 25, and Tier 5 is next 25. <br /> <br />A. Basics of the credit <br />· Equal to 7% of the excess of the eligible investment amount of machinery and <br /> equipment over the applicable threshold placed in service in NC in a taxable year <br /> Credit not taken in the taxable year placed in service but in equal installments over <br /> next 7 years <br /> <br />B. Special definitions <br />· Machinery and equipment: Engines, machinery, tools and implements capitalized <br /> under the Code and used in an eligible industry sector. Does not include real <br /> property or rolling stock. <br /> Purchase: as defined in Section 179 of the Code. <br />· Cost: as defined n Section 179 of the Code. <br />· Eligible investment amount: see D below. <br />· Base year: see D below. <br />· Threshold: see E below. <br /> <br />C. Placed in service requirement <br />· Placed in service: generally when capitalized on the books <br /> <br />D. Eligible investment amount <br />· Lesser of the cost of the eligible machinery and equipment, and the amount by <br /> which the cost of machinery and equipment in service on last day of taxable year in <br /> which credit is claimed exceeds cost that was in service on last day of base year <br />· Base year is the is year of the three preceding taxable years with the most <br /> machinery and equipment in service in NC <br /> <br />Developers' Presentation <br /> <br />3 8/5/96 <br />,'-- _ ~:;~ , <br /> <br /> <br />