IDAPA 35.01.01.711 — IDAHO INVESTMENT TAX CREDIT: TAXPAYERS ENTITLED TO THE CREDIT (RULE 711)

Section 63-3029B, Idaho Code
01.
Unitary Taxpayers. A corporation included as a member of a unitary group may elect to share the
investment tax credit it earns but does not use with other members of the unitary group. Before the corporation may
share the credit, it must claim the investment tax credit to the extent allowable against its tax liability.
(4-6-23)
a.
The credit available to be shared is the amount of investment tax credit carryover and credit earned
for the taxable year that exceeds the limitation provided in Section 63-3029B(4), Idaho Code. The limitation is
applied against the tax computed for the corporation that claims the credit. Credit shared with another member of the
unitary group reduces the carryforward.
(4-6-23)
b.
In the taxable year when a corporation that earned the investment tax credit is acquired or disposed
of, only a portion of the tax of the other members of the unitary group may be offset with shared investment tax credit
from that corporation. To determine the allowable portion of the tax, a percentage is calculated by dividing the
number of days that the corporation that earned the investment tax credit is included in the unitary group's taxable
year by the total number of days in the taxable year. The tax for each member with an Idaho filing requirement is
multiplied by the percentage. The result is the amount of tax that can be offset with a share of the credit, subject to
other limitations imposed by law or related rules.
(4-6-23)
02.
Conversion of C Corporation to S Corporation.
(4-6-23)
a.
An investment tax credit carryover earned by a C corporation that has converted to an S corporation
is allowed against the S corporation's tax on net recognized built-in gains and excess net passive income. The credit is
allowed against this tax until the carryover period has expired. The credit is not allowed against the tax computed
pursuant to Section 63-3022L, Idaho Code. In addition, the credit may not be passed through to the S corporation
shareholders.
(4-6-23)
b.
The election to file as an S corporation does not cause recapture of investment tax credit. However,
the S corporation is liable for any recapture of credit originally claimed by the C corporation as provided by Rule 715
of these rules.
(4-6-23)
03.
Agricultural Cooperatives. The portion of the investment tax credit earned by an agricultural
cooperative that it cannot use for the taxable year is to be allocated to the members of the cooperative. If qualifying
property is disposed of or ceases to qualify prior to the close of its estimated useful life, the recapture of credit as
provided by Rule 715 of these rules applies as though the cooperative did not allocate any of the original credit to the
members.
(4-6-23)
a.
The investment tax credits claimed by the agricultural cooperative and its members may not be
more than one hundred percent (100%) of the credit earned.
(4-6-23)
04.
Leased Property. Generally, the credit for qualified investments in leased property is claimed by
the lessor. A lessee may claim the investment tax credit on leased property only as provided in Paragraphs 711.04.a.
and 711.04.b. of this rule.
(4-6-23)
a.
If the lessor elected to pass the investment tax credit to the lessee and filed the federal election
pursuant to the Internal Revenue Code and Treasury Regulations prior to the 1986 Tax Reform Act, the investment
tax credit is to be claimed by the lessee. Both parties must attach the original election and a schedule identifying the
qualifying property.
(4-6-23)
b.
If a taxpayer is a lessee in a conditional sales contract, he is entitled to the investment tax credit on
any qualifying property subject to the contract since the lessee is considered the purchaser of the property.
(4-6-23)