Form 49E-Inst Instructions for Form 49E

and ending Aug 31 2012 Calendar year 2012 Fiscal year beginning Sept 1 2011 Items that do not qualify include: 05 16 12 05 16 12 and ending Aug 31 2010 and ending Aug 31 2011 and ending Dec 31 2010 Asset Description Asset Number Attach copies of all Forms 49E that list used property to the personal property declaration sent to each county or Buildings and their structural components A building is any structure enclosing a space within its walls usually covered by a roof the purpose of which is to provide shelter or housing working office parking display or sales space This includes apartment houses factory and office buildings warehouses barns garages railway or bus stations and stores It does not include a structure that is essentially an item of machinery Structural components include parts of a building such as walls partitions floors ceilings and any permanent covering such as paneling tiling windows doors all components of a central air conditioning or heating system plumbing and plumbing fixtures (including sprinkler systems and fire escapes) Calendar year 2010 Calendar year 2011 Complete a separate Form 49E that lists only used property and send that to each county Construction in progress County in Which Asset Located Date Placed in Service DENIAL OF QIE EIN00031 EIN00031p2 EIN00031p3 Elevators and escalators Enter a description of the asset The description must be in sufficient detail to identify what the property is and to determine if it qualifies If the make model or serial number is not available include other identifying information that will describe the asset Enter the asset s assigned identification number Enter the asset s original cost This should be the same amount you would list as the purchase price on the Idaho Personal Property Declaration Include trade in allowances and all associated costs incurred to acquire and prepare the item for its intended use Enter the beginning and ending dates of the qualifying loss year This must be the second preceding income tax year from the income tax year in which the property is placed in service Enter the county in which the asset is located If the property is used in more than one county enter the home county in which the asset is located Enter the date you placed the asset in service Property is placed in service in the earlier of : Enter the name that is used on your personal property declaration or operator s statement Enter your Social Security Number or your Federal Employer Identification Number whichever is applicable in the space provided If you were included in a combined report enter the name of the corporation the Idaho income tax return is filed under and its Federal Employer Identification Number FIRST PRECEDING Fiscal year beginning Sept 1 2009 Fiscal year beginning Sept 1 2010 For example you file income tax returns for the fiscal year ending August 31 Assuming you had no short tax years assets you placed in service from: Form 49E is used to elect an exemption from property tax for personal property instead of earning the Idaho investment tax credit (ITC) on the property This exemption is referred to on Form 49E and in these instructions as the qualified invest ment exemption (QIE) Form 49E Page 2 Form 49E Page 3 General Information Have had negative Idaho taxable income in the second preceding income tax year from the income tax year in which you placed the property in service HEADING If during calendar year 2012 or the previous two years you had a short period tax year for income tax purposes you must attach a statement that identifies the ending dates for each income tax filing period during that two year period For example if during 2011 you changed from filing income tax returns on a calendar year basis to filing them on a June 30 year end basis attach a schedule identifying the tax year ending dates as December 31 2010 and June 30 2011 If the QIE is denied for all or part of the market value of any property the county assessor will notify you of the basis for the denial If you are a partnership or S corporation your net business income apportioned to Idaho plus the nonbusiness income or loss allocated to Idaho for the second preceding income tax year must be negative If you are claiming the QIE on used property you must notify all counties in which you are claiming the QIE of the amount of used property elected You may do this in one of two ways: If you are electing the QIE for property that is assessed as nonregulated operating prop erty by the Tax Commission you must list on Form 49E every county where each asset is located regardless of whether the asset is new or used If you are part of a unitary group of corporations filing a combined report for Idaho income tax purposes you must look to your Idaho taxable income as computed according to Idaho Code section 63 3027 to determine whether you had nega tive Idaho taxable income in the second preceding tax year This will be computed by applying your Idaho apportion ment factor to the combined income or loss for that year and including your income or loss allocated to Idaho If you did not use the asset in Idaho during the first year the property was placed in service the asset does not qualify For example if you purchased the asset in 2010 and used the asset outside of Idaho until moving it to Idaho to use during 2012 the asset will not qualify for the QIE If you elect the QIE you cannot earn the ITC or the biofuel infrastructure investment tax credit for Idaho income tax purposes on that property You cannot change your election to claim the QIE on property once you have made it If you sell or otherwise dispose of an item of property for which you claimed the QIE or if the property ceases to qualify during the five year period starting with the date the property was placed in service you must compute recapture Use Form 49ER to calculate the recapture If you file income tax returns on a fiscal year end basis and in one calendar year you placed property in service in two different fiscal years you will need to determine separately for each fiscal year whether you had negative Idaho taxable income in the second preceding income tax year from the tax year the property was placed in service If you file your income tax returns on a calendar year basis and you did not have any short period tax years during the previous two years enter January 1 2010 to December 31 2010 If you did not have negative Idaho taxable income for 2010 you cannot make the election on property placed in service during 2012 If you file your income tax returns on a fiscal year basis or you had a short period income tax year you may have two different qualifying loss years Identify the applicable qualifying loss year for each asset If you had two income tax filing periods that ended during 2012 enter both ending dates Indicate whether the asset is new or used For the limitations on used property see Used Property on page 2 Instructions for Idaho Form 49E January 1 2012 through August 31 2012 are assets placed in service during fiscal year ended August 31 2012 You must have had negative Idaho taxable income for the fiscal year ended August 31 2010 to elect the QIE on any of these assets LISTING OF PROPERTY ELECTED LOSS IN SECOND PRECEDING TAX YEAR Negative Idaho taxable income is computed for a year before applying any net operating losses from other years that you may be able to carry forward or carry back to that year If you were not doing business in Idaho in the second preceding income tax year from the year you placed the property in service you do not qualify for the exemption New or Used Not have your rate of charge or rate of return regulated or limited by federal or state law and Original Cost Other tangible property (not including a building and its structural components) but only if used for certain purposes Other tangible property including depreciable land improvements (except a building and its structural components) qualifies if it falls in a category of property used as integral parts of manufacturing production or extraction or as an integral part of furnishing transportation communications electrical energy gas water or sewage disposal services by a person engaged in a trade or business of furnishing any such service or is a research or bulk storage facil ity used in connection with any of these activities The research facility does not have to be an integral part of the busi ness activity Bulk storage means the storage of fungible commodities in a large mass before consumption or use Petroleum storage facilities PLACED IN SERVICE Property subject to amortization Property used in certain lodging facilities Qualifying Loss Year QUALIFYING PROPERTY QUALIFYING TAXPAYERS Qualifying used property is limited to a total cost of $150 000 per income tax year whether you claim the QIE the ITC or a combination of both for that year In addition you must have acquired the used property by purchase If you have used property in excess of $150 000 you must select the specific items on which to claim the QIE If you select an item the entire cost must be taken into account unless you have exceeded the $150 000 limit If the $150 000 used property limit is exceeded the remaining amount of an item selected and any items not selected do not qualify for the ITC For example used assets A B C and D each costing $70 000 were placed in service Two of the assets will qualify and a third asset will partially qualify You must select which two items qualify and which third item partially qualifies If you claim the QIE on assets A and B you may claim a partial QIE on either asset C or D or you may claim the ITC on asset C or D but only up to $10 000 the remaining amount of the $150 000 used property limitation SECOND PRECEDING September 1 2012 through December 31 2012 are assets placed in service during fiscal year ended August 31 2013 You must have had negative Idaho taxable income for the fiscal year ended August 31 2011 to elect the QIE on any of these assets Short tax year beginning Feb 1 2010 Short tax year beginning Jan 1 2011 and ending Aug 31 2011 Single purpose agricultural or horticultural structures and Single purpose agricultural or horticultural structures qualify if specifically designed constructed and used solely for a qualifying purpose If a structure is used for both qualifying and nonqualifying purposes the structure does not qualify SPECIFIC INSTRUCTIONS Tangible personal property (other than air conditioning and heating units) Tangible personal property means any tangible property except land and land improvements It includes all property that is contained in or attached to a building (other than structural components of the building) TAX YEAR TAX YEAR PROPERTY The cost of property expensed The following is a brief description as to what constitutes qualifying property For more detailed information contact the Tax Commission Taxpayer Services at (208) 334 7660 or (800) 972 7660 The following table provides examples of determining the second preceding income tax year The second and fourth examples show how you determine the second preceding tax year when you have a short tax period that re sults from a change in income tax years The income tax year in which under your depreciation practice the period for depreciation of the property begins or The income tax year in which you placed the property in a condition or state of readiness and availability for a specifically assigned function The QIE is allowed for the two calendar years that follow the end of the calendar year in which the qualifying property was placed in service For example for property placed in service during calendar year 2012 the QIE is available for calendar years 2013 and 2014 The QIE is available only on property that qualifies for the Idaho ITC Idaho generally follows the definition of qualified investment credit property found in the Internal Revenue Code (IRC) Sections 46 and 48 as in effect prior to 1986 The property must be used in Idaho the first year it is placed in service Qualifying property generally includes: To determine whether you had negative Idaho taxable income in the second preceding income tax year you must go back two income tax years from the income tax year in which you placed the property in service For example if you file income tax returns on a calendar year basis and you placed property in service during calendar year 2012 you must have had negative Idaho taxable income for the calendar year 2010 to qualify for the election A short tax year counts as one income tax year To qualify for the QIE you must: Used Property You must designate each specific asset and its location for which you are claiming the QIE Group listings of assets will not be accepted If you cannot list all the elected assets on page one use page two or multiple pages two as necessary You must have had negative Idaho taxable income without regard to net operating loss carryovers or carrybacks in the second preceding tax year from the income tax year you placed the property in service In the space provided enter the last day of your income tax year that ended in calendar year 2012 For example if you are a calendar year taxpayer enter December 31 2012 If you are a fiscal year taxpayer enter the last day of the fiscal year that ended during 2012 You must include Form 49E with your operator s statement(s) or personal property declaration(s) filed for 2013 You must also include a copy of this form with your original Idaho income tax return(s) for the income tax year(s) in which the prop erty was placed in service If you submit multiple Forms 49E to one or more assessors you must include a copy of each Form 49E with the applicable year s income tax return(s)