North Dakota Administrative Code › Title 81 - Tax Commissioner › Article 81-03 - Income Taxes and Privilege Taxes Based on Income › Chapter 81-03-02.1 - Income Tax on Individuals, Estates, Trusts, and Fiduciaries › Section 81-03-02.1-12 - Seed capital investment credit - Limitations on credit -Carryover

Current through Supplement No. 393, July, 2024
1. The provisions in this subsection apply to
				the calculation and administration of the credit under North Dakota Century
				Code chapter 57-38.5 for tax years beginning before January 1, 2002:
a. The credit must first be credited against
				the taxpayer's income tax liability for the taxpayer's taxable year in which
				the investment is paid for in full.
b. For purposes of applying the annual
				limitation on the total amount of credits allowed for investments in one
				qualified business under subsection 6 of North Dakota Century Code section
				57-38.5-03, the total amount of
				investments and the total amount of gross receipts from out-of-state sales must
				be determined on a calendar year basis.
c. For purposes of applying the annual
				limitation on the total amount of credits allowed for investments in all
				qualified businesses under North Dakota Century Code section
				57-38.5-05, the total amount of
				investments and related credits must be determined on a calendar year basis.
d. For purposes of determining
				whether a taxpayer has reached the annual minimum or maximum amount of
				investment for which a credit is allowed under subsection 1 of North Dakota
				Century Code section
				57-38.5-03, the total amount of
				investments must be determined by aggregating all of the investments made by a
				taxpayer within the taxpayer's taxable year.
e. Every qualified business shall file with
				the tax commissioner a written report showing the total amount of its gross
				receipts from out-of-state sales on a calendar year basis. The report must be
				filed by January thirty-first following the end of each calendar year. If a
				qualified business fails to file a written report, the total amount of the
				credit attributable to investments made in that qualified business during the
				calendar year for which the report was required to be filed must be disallowed
				until such time as the report is received by the tax commissioner.
f. If a taxpayer elects to determine the
				taxpayer's state income tax liability under North Dakota Century Code section
				57-38-30.3, the credit is not
				allowed in the taxable year of the election or in any subsequent taxable year
				to which an unused credit may otherwise be carried.
g. For purposes of applying subsection 3 of
				North Dakota Century Code section
				57-38.5-03, the amount of the
				credit which may be carried forward from the taxpayer's taxable year in which
				the related investment was made is the amount of the credit not allowed because
				of subsection 2 of North Dakota Century Code section
				57-38.5-03.
h. If a partnership makes an investment in a
				qualified business, and if the taxable year of the partnership differs from the
				taxable year of the partner, the amount of credit allocated to the partner
				under subsection 4 of North Dakota Century Code section
				57-38.5-03 must first be credited
				in the partner's taxable year in which the partnership's taxable year ends.
i. If a taxpayer makes an
				investment in a qualified business and then sells the investment back to the
				qualified business within three years of making the investment, the credit must
				be disallowed. If a taxpayer makes an investment in a qualified business and
				then sells the investment to a second taxpayer, the credit attributable to the
				investment must be allowed to the first taxpayer provided the investment is
				held by the qualified business for three years, and no credit may be allowed to
				the second taxpayer.
j. For
				purposes of subsection 8 of North Dakota Century Code section
				57-38.5-03, "controlling interest"
				means ownership of over fifty percent of the voting stock and over fifty
				percent of each class of other stock of the corporation.