§ 59-7-610 — Recycling market development zones tax credits.

(1) Subject to other provisions of this section, a taxpayer that is a business operating in a recycling market development zone as defined in Section 19-13-102 may claim the following nonrefundable tax credits:

(1)(a) a tax credit equal to the product of the percentage listed in Subsection 59-7-104(2) and the purchase price paid for machinery and equipment used directly in:
(1)(a)(i) commercial composting; or
(1)(a)(ii) manufacturing facilities or plant units that:

(1)(a)(ii)(A) manufacture, process, compound, or produce recycled items of tangible personal property for sale; or
(1)(a)(ii)(B) reduce or reuse postconsumer waste material; and
(1)(b) a tax credit equal to the lesser of:
(1)(b)(i) 20% of net expenditures to third parties for rent, wages, supplies, tools, test inventory, and utilities made by the taxpayer for establishing and operating recycling or composting technology in the state; and
(1)(b)(ii) $2,000.
(2) (2)(a) To claim a tax credit described in Subsection (1), the taxpayer shall receive from the Department of Environmental Quality a written certification, on a form approved by the commission, that includes:
(2)(a)(i) a statement that the taxpayer is operating a business within the boundaries of a recycling market development zone;
(2)(a)(ii) for a claim of the tax credit described in Subsection (1)(a):

(2)(a)(ii)(A) the type of the machinery and equipment that the taxpayer purchased;
(2)(a)(ii)(B) the date that the taxpayer purchased the machinery and equipment;
(2)(a)(ii)(C) the purchase price for the machinery and equipment;
(2)(a)(ii)(D) the total purchase price for all machinery and equipment for which the taxpayer is claiming a tax credit;
(2)(a)(ii)(E) a statement that the machinery and equipment are integral to the composting or recycling process; and
(2)(a)(ii)(F) the amount of the taxpayer's tax credit; and
(2)(a)(iii) for a claim of the tax credit described in Subsection (1)(b):

(2)(a)(iii)(A) the type of net expenditure that the taxpayer made to a third party;
(2)(a)(iii)(B) the date that the taxpayer made the payment to a third party;
(2)(a)(iii)(C) the amount that the taxpayer paid to each third party;
(2)(a)(iii)(D) the total amount that the taxpayer paid to all third parties;
(2)(a)(iii)(E) a statement that the net expenditures support the establishment and operation of recycling or composting technology in the state; and
(2)(a)(iii)(F) the amount of the taxpayer's tax credit.
(2)(b) (2)(b)(i) The Department of Environmental Quality shall provide a taxpayer seeking to claim a tax credit under Subsection (1) with a copy of the written certification.
(2)(b)(ii) The taxpayer shall retain a copy of the written certification for the same period of time that a person is required to keep books and records under Section 59-1-1406.
(2)(c) The Department of Environmental Quality shall submit to the commission an electronic list that includes:
(2)(c)(i) the name and identifying information of each taxpayer to which the Department of Environmental Quality issues a written certification; and
(2)(c)(ii) for each taxpayer, the amount of each tax credit listed on the written certification.
(3) A taxpayer may not claim a tax credit under Subsection (1)(a), Subsection (1)(b), or both that exceeds 40% of the taxpayer's state income tax liability as the tax liability is calculated:

(3)(a) for the taxable year in which the taxpayer made the purchases or payments;
(3)(b) before any other tax credits the taxpayer may claim for the taxable year; and
(3)(c) before the taxpayer claims a tax credit authorized by this section.
(4) The commission shall make rules governing what information a taxpayer shall file with the commission to verify the entitlement to and amount of a tax credit.
(5) Except as provided in Subsections (6) through (8), a taxpayer may carry forward, to the next three taxable years, the amount of a tax credit described in Subsection (1)(a) that the taxpayer does not use for the taxable year.
(6) A taxpayer may not claim or carry forward a tax credit described in Subsection (1)(a) in a taxable year during which the taxpayer claims or carries forward a tax credit under Section 63N-2-213.
(7) A taxpayer may not claim a tax credit described in Subsection (1)(b) in a taxable year during which the taxpayer claims or carries forward a tax credit under Section 63N-2-213.

Legislative History

Amended by Chapter 367, 2021 General Session