Credit amount Effective January 1, 2011, a capital investment credit against income tax is allowed for any tax year in which the taxpayer places qualified manufacturing and productive equipment property in service in this State. The amount of the credit allowed by this section is equal to the aggregate of:
0.5% of total aggregate bases for all 3-year property that qualifies;
1.0% of total aggregate bases for all 5-year property that qualifies;
1.5% of total aggregate bases for all 7-year property that qualifies;
2.0% of total aggregate bases for all 10-year property that qualifies;
2.5% of total aggregate bases for all 15-year or greater property that qualifies.
Whether property is 3-year property, 5-year property, 7-year property, 10-year property or 15-year property is determined based on the applicable recovery period for such property under Section 168(e) of the Internal Revenue Code (IRC).
Qualified property "Qualified manufacturing and productive equipment property" means any property: (a) which is used as an integral part of manufacturing or production, or used as an integral part of extraction of or furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services in the economic impact zone; (b) which is tangible property to which IRC Section 168 applies; (c) which is Section 1245 property (as defined in IRC Section 1245(a)(3)); and (d)(i) the construction, reconstruction, or erection of which is completed by the taxpayer in this State; or (ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer inside this State.
In the case of any computer software which is used to control or monitor a manufacturing or production process inside this State and with respect to which depreciation (or amortization in lieu of depreciation) is allowable, the software must be treated as qualified manufacturing and productive equipment property.
This credit does not apply to any property to which the other tax credits would apply unless the taxpayer elects to waive the application of the other credits to the property.
Credit carryover Unused credit allowed pursuant to this section may be carried forward for 10 years from the close of the tax year in which the credit was earned.
In the case of credit unused within the initial 10-year period, a taxpayer may continue to carry forward unused credits for use in any subsequent tax years if the taxpayer: (a) is engaged in this State in an activity or activities listed under the North American Industry Classification System Manual (NAICS) Section 31, 32, or 33; (b)(i) is employing 1,000 or more full-time workers in this State and having a total capital investment in this State of not less than $500 million; or (ii) is employing 850 or more full-time workers in this State and having a total capital investment in this State of not less than $750 million; and (c) made a total capital investment of not less than $50 million in the previous five years.