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E. Threshold <br />· Threshold for investment of machinery and equipment established by enterprise tier <br />· Thresholds are: - Tier 1:0 <br /> - Tier2: $100,000 <br /> - Tier 3: $ 200,000 <br /> - Tier 4: $ 500,000 <br /> - Tier 5:$1,000,000 <br />· Amount of Credit thus equals: Eligible investment amount minus threshold times 7% <br /> <br />F. Performance requirements <br />· If machinery and equipment moved out of state during seven years, forfeits <br /> remainder <br />· If moved to a different tier during the seven years, remaining installments allowed to <br /> extent which would have been allowed if initially placed in service in that tier (thus <br /> may lose some eligibility moving from a lower threshold to a higher threshold tier) <br /> <br />A. Basics of the Credit <br />· Credit for each new, full-time job created for eligible employers that have at least five <br /> employees for at least 40 weeks during the taxable year <br />· Credit equal to fixed dollar amount per job, determined by tier in which position is <br /> located, taken in equal installments over four years <br /> - Tier One: $12,500 per job <br /> - Tier Two: $ 4,000 per job <br /> - Tier Three $ 3,000 per job <br /> - Tier Four $ 1,000 per job <br /> - Tier Five $ 500 per job <br />· Credit taken in four years following the taxable year in which the job is created <br />· Jobs transferred from one area in the state to another are not considered new jobs <br /> <br />Special definitions <br />Location of position: a position is located in an area if 50% or more of the <br />employee's duties are performed in that area. Revenue has interpreted this to mean <br />that at least 50% of the benefit of that employee must accrue to that location. <br /> <br />Reserving eligibility in a tier for future job creation <br />A taxpayer who plans to create at least 20 new full-time jobs within two years can <br />sign a letter of commitment with the Department of Commerce and "reserve" <br />qualification for the level of credit in that tier even if the jobs are not created in that <br />year. If 20 new jobs are not created within two years, the taxpayer can qualify for <br />the (~redit amount applying to that tier for the number of new jobs created. <br /> <br />Developers' Presentation <br /> <br />4 <br /> <br />8/5/96 <br /> <br /> <br />