IDAPA 35.01.01.714 — IDAHO INVESTMENT TAX CREDIT: CREDIT EARNED ON PROPERTY USED BOTH IN AND

OUTSIDE IDAHO IN TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 1995 (RULE 714).
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.01
Idaho State Tax Commission
Income Tax Administrative Rules
Section 715
Page 100
Section 63-3029B, Idaho Code
01.
In General. Property must be used at least part of the time in Idaho to qualify for the investment
tax credit, provided it otherwise qualifies for the credit. It must also be used in Idaho in each taxable year during the
recapture period.
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02.
Election of Methods. The taxpayer must elect to compute the investment tax credit on property
used both in and outside Idaho using either the percentage-of-use method or the amount of that property correctly
included in the Idaho property factor numerator. The credit for all property used both in and outside Idaho must be
computed using the method elected.
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a.
Percentage-of-Use Method. If the percentage-of-use method is elected, the basis of each qualified
asset is multiplied by the percentage of time, miles, or other measure that accurately reflects the use of that asset in
Idaho. The use of aircraft within and without Idaho during the taxable year will be determined by the ratio of
departures from locations in Idaho to total departures.
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b.
Property Factor Method. If the property factor numerator option is elected, the qualified investment
is the basis of the asset correctly included in the numerator of the Idaho property factor for the year the credit is
earned.
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i.
The amounts of investment tax credit computed under the percentage-of-use method and the
property factor numerator option are generally the same. Differences may result when a taxpayer uses certain MTC
special industry regulations that allow the taxpayer to vary from using the percentage-of-use method for determining
the Idaho numerator for each item of mobile property, and instead allow another method, such as the ratio of mobile
property miles in the state compared to total mobile property miles or the ratio of departures of aircraft from locations
in the state compared to total departures. These special industry regulations include the regulations for airlines,
railroads, and trucking companies. See Rule 580 of these rules for a list of the special industries.
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ii.
"Correctly included in the numerator of the Idaho property factor" means that the amount included
in the Idaho property factor numerator was correctly computed using Section 63-3027, Idaho Code, and related rules
including any MTC special industry regulations that apply to the taxpayer. If the amount included in the Idaho
property factor numerator exceeds the amount that should have been included using Section 63-3027, Idaho Code and
related rules, the investment tax credit will be allowed only on the amount that reflects the correct calculation for
purposes of computing the Idaho property factor numerator. For example, a taxpayer includes one hundred percent
(100%) of the basis of an asset in the Idaho property factor numerator, but the amount correctly computed under
Section 63-3027, Idaho Code, should have been fifty percent (50%) of the basis of the asset. The investment tax
credit will be allowed only on the fifty percent (50%) of the basis of the asset.
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03.
Order of Limitations. The qualified investment in property used both in and outside Idaho is
determined by first applying the rules of this section and then the used property limitations outlined in Rule 710.
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04.
Examples. Available at Income Tax Rules Examples.
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