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Tax Reduction Credit - Other Factors
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The Zone Allocation Factor takes into account the percentage of the QEZE’s assets and employee expenses
in Zones. To calculate this factor, the QEZE’s total assets in the
Zones are divided by the total assets In the State and added to the QEZE’S total wages
and employee compensation paid in the Zones divided by the total wages and
employee compensation paid throughout the State, with this sum being divided by 2.
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The Tax Factor Is simply the tax payable by the taxpayer, and is ascertained under §210, the larger of (a) or (c) for a corporation, §601, (a) through (d) for
S corporations, limited liability companies, partnerships and
individuals, §1455 the larger of (a) or (b)(2) for banking institutions and §15O2, the larger of (a)(1) or (a)(3) for insurance companies.
A new business, located only in an Empire Zone can effectively eliminate its entire State tax
burden with this credit, and the effects are equally beneficial for an existing business with a
significant presence in the Empire Zones and which has increased employment.
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