Fill - Free fillable PO BOX 280701 BUREAU OF CORPORATION TAXES HARRISBURG (Pennsylvania) PDF form

KEYSTONE OPPORTUNITY ZONE/

STRATEGIC DEVELOPMENT AREA

FORM AND INSTRUCTIONS

CALCULATION OF TAX CREDIT

FOR CORPORATE NET INCOME TAX

BUREAU OF CORPORATION TAXES

PO BOX 280701

HARRISBURG PA 17128-0701

RCT-101KOZ (05-16)

To be completed by businesses subject to corporate

net income tax that are approved for tax benefits

under the Keystone Opportunity Zone (KOZ),

Keystone Opportunity Expansion Zone (KOEZ),

Keystone Opportunity Improvement Zone (KOIZ) or

Strategic Development Area (SDA) program.

Important: This schedule is not to be used by

entities involved in the operation of a railroad,

truck, bus or airline company; pipeline or natural

gas company; or water transportation company.

Business taxpayers that qualify for KOZ, KOEZ,

KOIZ or SDA benefits MUST first complete the PA

Corporate Tax Report, RCT-101, without taking into

account any KOZ, KOEZ, KOIZ or SDA benefits to

which they might be entitled.

In order to calculate a tax credit to be applied against

the permitted taxes, special schedule RCT-101

KOZ/KOEZ must be completed and submitted as

part of form RCT-101.

A copy of the letter from the Department of

Community and Economic Development approving

the taxpayer for benefits from one of these programs

for the current tax year must be filed with the

RCT-101.

Taxpayers claiming benefits from any of these

programs must check the “KOZ/EIP/SDA” Box on

Page 1 of the RCT-101.

Important: Beginning Jan. 1, 2009, the calculation

of the KOZ/KOEZ/KOIZ credit no longer includes the

sales factor. The sales factor is still included in the

calculation of the SDA credit.

Failure to provide these documents will result in a

delay in the processing of the credit and may result

in an assessment for underpayment of tax reported

on the RCT-101.

Indicate the applicable program from which

KOZ/KOEZ/KOIZ or SDA benefits are claimed.

Property Apportionment Factor

Within Subzone, Expansion Subzone or SDA — The

average value of the taxpayer’s real and tangible

personal property owned and used in the subzone,

expansion subzone or SDA plus eight times the

rental rate for real and tangible personal property

rented and used in the subzone, expansion subzone

or SDA.

Within PA — The average value of taxpayer’s real

and tangible personal property owned and used

in PA plus eight times the rental rate for real and

tangible personal property rented and used in PA.

Payroll Apportionment Factor

Within Subzone, Expansion Subzone or SDA — Total

compensation paid in the subzone, expansion

subzone or SDA. Compensation is paid in the

subzone, expansion subzone or SDA if:

(A) The person's service is performed entirely

within the subzone, expansion subzone or SDA;

(B) The person's service is performed within and

outside the subzone, expansion subzone or SDA,

but the service performed outside the subzone,

expansion subzone or SDA is incidental to the

person's service within the subzone, expansion

subzone or SDA; or

expansion subzone or SDA and the base of

operations is in the subzone, expansion subzone

or SDA. If there is no base of operations,

compensation is paid in the subzone, expansion

subzone or SDA if the place from which the

service is directed or controlled is in the subzone,

expansion subzone or SDA. If the place from

which the service is directed or controlled is not

in a location in which the employee’s work is

performed, compensation is paid in the subzone,

expansion subzone or SDA if the employee’s

residence is within the subzone, expansion

subzone or SDA.

Within PA — All compensation paid in PA.

Taxpayers claiming the KOZ/KOEZ/KOIZ credit for

tax periods beginning after Dec. 31, 2008, should

stop here and go to the Calculation of the Credit.

SCHEDULE RCT-101 KOZ/KOEZ/KOIZ/SDA INSTRUCTIONS

COMPLETION OF THE FORM

Sales Apportionment Factor

To be completed by taxpayers approved for and

claiming the SDA Credit.

Within SDA — Total sales in the SDA during the tax

period.

Sales of tangible personal property are in the SDA

if the property is delivered or shipped to a purchaser

that takes possession within the SDA, regardless of

the FOB point or other conditions of the sale. Sales,

other than sales of tangible personal property, are

in the SDA if:

(A) The income-producing activity is performed

in the SDA; or

(B) The income-producing activity is performed

within and outside the SDA, and a greater

proportion of the income-producing activity

is performed in the SDA than in any other

location, based on costs of performance.

Within PA — All sales sourced to locations inside PA.

This includes all sales destined to locations inside

PA plus sales of goods picked-up by customers in

the SDA, either in their own vehicles or by common

carriers arranged for by the customers, and

transported to locations outside the commonwealth.

Since the sourcing of sales picked-up in the SDA

and transported outside the commonwealth is

different for the calculation of the credit than the

rules for sourcing these sales in the calculation of

the sales factor apportionment, this may not equal

the sales reported inside PA on RCT-106.

Calculation of the Credit Percentage —

KOZ/KOEZ/KOIZ

For each apportionment factor, divide the amount

within the subzone or expansion subzone by the

property and payroll within PA. The results of each

calculation are carried out six places to the right of

the decimal. Total the property and payroll factors

and divide by two. This is your Credit Percentage.

Calculation of the Credit Percentage — SDA

For each apportionment factor, divide the amount

within the SDA by the property, payroll and sales

within PA. The results of each calculation are

carried out six places to the right of the decimal.

Total the property, payroll and sales factors and

divide by three. This is your Credit Percentage.

IMPORTANT: The factors are not weighted.

Multiply the self-assessed tax from the RCT-101 by

the Credit Percentage. This is the credit amount.

Enter this amount in the “Restricted Credit” Box

for the CNI tax on Page 1 of RCT-101, Step D,

Column C. The total credit may not exceed the

tax liability for the period.

KOZ/KOEZ/KOIZ SDA

Property Property In Zone 10 Property In SDA 10

PA Property 100 = 0.100000 PA Property 100 = 0.100000

Payroll Payroll In Zone 20 Payroll In SDA 20

PA Payroll 100 = 0.200000 PA Payroll 100 = 0.200000

Sales Not Applicable Sales In SDA 5

PA Sales 100 = 0.050000

Total 0.300000 0.350000

Credit

Percentage 0.300000 / 2 = 0.150000 0.350000 / 3 = 0.116667

Credit Tax $1,000 X 0.150000 = $ 150 Tax $1,000 X 0.116667 = $ 117

EXAMPLE

PA DEPARTMENT OF REVENUE

BUREAU OF CORPORATION TAXES

KOZ/KOEZ/KOIZ SDA

DO NOT USE THIS FORM IF THE CORPORATE TAXPAYER IS A TRANSPORTATION COMPANY, FINANCIAL

INSTITUTION, MUTUAL THRIFT INSTITUTION, INSURANCE COMPANY, PIPELINE AND NATURAL GAS

COMPANY, REGULATED INVESTMENT COMPANY OR A HOLDING COMPANY AS DEFINED IN ARTICLE VI OF THE

TAX REFORM CODE.

The calculation of the tax credits must be in accordance with the attached instructions.

CORPORATION NAME

REVENUE ID TAX YEAR BEGINNING TAX YEAR ENDING

PROPERTY

Within Subzone,

Expansion Subzone or SDA

= =

Within PA

PAYROLL

Within Subzone,

Expansion Subzone or SDA

= =

Within PA

Taxpayers claiming the KOZ/KOEZ/KOIZ credit for tax periods beginning after Dec. 31, 2008, should stop here and go

to the Calculation of the Credit.

SALES

To be completed by taxpayers approved for and claiming the SDA Credit.

Within SDA

= =

Within PA

TOTAL .

TOTAL . ÷ = CREDIT PERCENTAGE .

Corporate Net Income Tax

Self-Assessed Tax

Credit Percentage X

Conditional Tax Credit =

Carry the conditional tax credit to the first page of RCT-101, Step D, Column C for corporate net income tax. The total credit

may not exceed the tax liability for the period.

RCT-101KOZ (05-16)

FILL IN FORM USING ALL CAPS.

DO NOT USE DASHES (-) OR SLASHES (/) IN ANY FIELD. ENTER DATES AS MMDDYYYY. USE WHOLE DOLLARS ONLY.

START

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MMDDYYYY