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Sales Use Tax Credits

The Sales Use Tax Credit allows a business to offset the sales and use taxes paid on the purchase of “Qualified Property.” The credit may be used for sales and use taxes paid for up to $1 million of qualified property for individuals, estates, trusts, and partnerships, and up to $20 million of “Qualified Property” for corporations (excluding S-Corporations). The equipment must have been purchased after January 30, 2009 and must be put into service prior to January 29, 2024.

For the purposes of the Sales/Use Tax Credit, “Qualified Property” includes the following:

• Machinery or machinery-related parts used to:
  - Manufacture, process, fabricate, or otherwise assemble a product;
  - Produce renewable energy resources; or
  - Control air or water pollution.

• Data processing and communications equipment including, but not limited to, computers, computer-automated drafting systems, copy machines, telephone systems, and fax machines.

• Motion picture manufacturing equipment central to production and postproduction including, but not limited to, cameras, audio recorders, and digital image and sound processing equipment.

As with Hiring Credits, the credits may not be used to offset more than 50% of the net tax for taxable years beginning in 2008 or 2009 if a corporation’s taxable income or individual’s net business income is $500,000 or more. However, unused credits may still be accrued and carried over to future years as usual.

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