|
|
Enterprise Zone Credit Calculation
ABC, Inc. owns land with a
market value of $200,000. The firm elects to construct a 100,000
sq ft plant (at a cost of $30 per sq ft) that will house 200
employees. The plant is located within the Salisbury Enterprise
Zone.
|
Property Tax Rates |
|
|
Salisbury |
$
.819 per $100 |
|
Wicomico |
$
.760 per
$100 |
|
Total Tax Rate |
$ 1.58 per $100 |
|
Property Tax
Credits |
|
|
|
|
|
Current assessed value of
land: |
$200,000 |
|
|
|
|
Assessed value with improvements
(100,000 x $30 +
$200,000) |
$3,200,000 |
|
|
|
|
Annual Tax:
($3,200,000 / $100) x $1.58 |
$50,560 |
|
|
|
|
Ten year taxes:
($50,560 x 10) |
$505,600 |
|
|
|
|
Assessment differential:
($3,200,000 - $200,000) |
$3,000,000 |
|
|
|
|
Tax credits applicable to: |
$3,000,000 |
|
|
|
|
Total tax credit (Years 1-5)
($3,000,000 / $100) x $1.58 x 80% x 5 |
$189,600 |
|
|
|
|
Total tax credit (Years 6-10)
($3,000,000 / $100) x $1.58 x 50% x 5 |
$118,500 |
|
|
|
|
Total Property Tax Credits
($189,600 + $118,500) |
$308,100 |
|
|
|
|
|
|
|
State Income
Tax Credits |
|
|
|
|
|
Enterprise Zone income tax
credit:
($1,000 x 200 emp's) |
$200,000 |
|
|
|
|
Job tax credit:
($1,000 x 200 emp's) |
$200,000 |
|
|
|
|
Total State Income Tax Credits
($200,000 + $200,000) |
$400,000 |
|
|
|
|
Total Tax Credits |
$708,100 |
|
|
