Idaho Election to claim qualified investment exemption

Election to claim qualified investment exemption
Form 49E, Election to Claim the Qualified Investment Exemption from Property Tax in Lieu of Investment Tax Credit and Instructions 2023
Form 49E
Election to Claim the Qualified Investment Exemption from Property Tax
Instead of Investment Tax Credit

2023

Use this form to elect the qualified investment exemption (QIE) from property tax for property placed in service during calendar year 2023.
Name

Social Security number or EIN

If this corporation is included in a combined report, enter the name of the corporation the Idaho income tax return is filed under, if different than above.
Name

EIN

Election — I elect to exempt the following property that was placed in service during calendar year 2023 from property tax for 2024 and 2025. I understand
I waive my right to claim the investment tax credit on this property at any time. Once I make the election, I can’t change it. I must recapture the property tax
benefit if, during the five-year recapture period, the property no longer qualifies as a qualified investment as defined in Idaho Code section 63-3029B.
Loss in Second Preceding Tax Year — To qualify for the QIE, you must have had an Idaho income tax loss without regard to net operating loss carryovers
or carrybacks in the second preceding tax year from the income tax year you placed the property in service. If you file income tax returns on a fiscal year
basis, see the instructions to determine your qualifying loss years. County assessors can check with the Tax Commission to verify you had a loss in the
applicable years.
List the ending date of your tax years that ended in calendar year 2023 _________________________
If you had a short-period tax year during calendar year 2023 or during the previous two years, include a statement that includes your tax year ending dates.
I elect to claim the QIE on the property listed below. The exemption for used property is limited. See instructions.
Asset
Asset Description
Number (Describe what the asset is, including make, model, and serial number)

County in Which
Asset Located

Date Placed
in Service

Qualifying Loss Year

(List beginning and ending date)

New or
Original Cost
Used

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(If additional space is required, complete Page 2.)

Under penalties of perjury I affirm that, to the best of my knowledge and belief, the property listed on Form 49E is qualified investment property as defined in
Idaho Code section 63-3029B, and that I haven’t or won’t claim the Idaho investment tax credit on the listed property.
Signature
Print Contact Name

Date
Contact Phone Number

To elect the QIE, you must include this form with the operator’s statement or personal property declarations filed for 2024. You must also include a copy of
your original Idaho income tax returns for the tax years in which the property was placed in service.
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Form 49E

Asset
Asset Description
Number (Describe what the asset is, including make, model, and serial number)

County in Which Date Placed in
Qualifying Loss Year
(List beginning and ending date)
Asset Located
Service

2023

(continued)

New or
Original Cost
Used

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(If you need more space, complete additional pages.)
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Form 49E — Instructions
Election to Claim the Qualified Investment Exemption
from Property Tax Instead of Investment Tax Credit
General Instructions
Use Form 49E to elect an exemption from property
tax for personal property instead of earning the
Idaho investment tax credit (ITC) on the property.
This exemption is referred to on Form 49E and
in these instructions as the qualified investment
exemption (QIE).
The QIE is allowed for the two calendar years
that follow the end of the calendar year that the
qualifying property was placed in service. For
example, for property placed in service during
calendar year 2023, the QIE is available for
calendar years 2024 and 2025.
If you elect the QIE, you can’t earn the ITC for Idaho
income tax purposes on that property. You can’t
change your election to claim the QIE on property
once you’ve made it. Compute recapture if you sell
or otherwise dispose of an item of property that
you claimed the QIE on or if the property no longer
qualifies during the five-year period starting with
the date the property was placed in service. Use
Form 49ER to calculate the recapture.
Include Form 49E with your operator’s statements
or personal property declarations filed for 2024.
Include a copy of this form with your original Idaho
income tax returns for the income tax years when
the property was placed in service. If you submit
multiple Forms 49E to one or more assessors,
include a copy of each Form 49E with the
applicable year’s income tax returns.
Qualifying Taxpayers
To qualify for the QIE, you must:
•	 Not have your rate of charge or rate of return
regulated or limited by federal or state law, and
•	 Have had negative Idaho taxable income in
the second preceding income tax year from
the income tax year in which you placed the
property in service
Negative Idaho taxable income is computed for a
year before applying any net operating losses from
other years that you may be able to carry forward or
carry back to that year. Such negative income must
coincide with you doing business in Idaho during the
same second preceding income tax year from the
date you placed the property in service.

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2023

To determine whether you had negative Idaho taxable
income in the second preceding income tax year, you
must go back two income tax years from the income
tax year when you placed the property in service. For
example, if you file income tax returns on a calendar
year basis and you placed property in service during
calendar year 2023, you must have had negative
Idaho taxable income for the calendar year 2021 to
qualify for the election. A short tax year counts as one
income tax year.
If you file income tax returns on a fiscal year-end
basis and in one calendar year you placed property
in service in two different fiscal years, you’ll need to
determine separately for each fiscal year whether
you had negative Idaho taxable income in the second
preceding income tax year from the tax year the
property was placed in service.
For example, you file income tax returns for the fiscal
year ending August 31. Assuming you had no short tax
years, assets you placed in service from:
•	 January 1, 2023 through August 31, 2023, are
assets placed in service during fiscal year ended
August 31, 2023. You must have had negative
Idaho taxable income for the fiscal year ended
August 31, 2021, to elect the QIE on any of
these assets.
•	 September 1, 2023 through December 31, 2023,
are assets placed in service during fiscal year
ended August 31, 2024. You must have had
negative Idaho taxable income for the fiscal year
ended August 31, 2022, to elect the QIE on any
of these assets.
If you’re part of a unitary group of corporations filing a
combined report for Idaho income tax purposes, you
must look to your Idaho taxable income as computed
according to Idaho Code section 63-3027 to determine
whether you had negative Idaho taxable income in
the second preceding tax year. This will be computed
by applying your Idaho apportionment factor to the
combined income or loss for that year and including
your income or loss allocated to Idaho.
The following table provides examples of determining
the second preceding income tax year. The second
and fourth examples show how you determine the
second preceding tax year when you have a short tax
period that results from a change in income tax years.

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Form 49E — Instructions

2023

(continued)

Tax Year Property
Placed in Service
Calendar year 2023

First Preceding
Tax Year
Calendar year 2022

Second Preceding
Tax Year
Calendar year 2021

Calendar year 2023

Calendar year 2022

Fiscal year beginning Sept. 1, 2022
and ending Aug. 31, 2023
Fiscal year beginning Sept. 1, 2022
and ending Aug. 31, 2023

Fiscal year beginning Sept. 1, 2021
and ending Aug. 31, 2022
Short tax year beginning Jan. 1, 2022
and ending Aug. 31, 2022

Short tax year beginning Feb. 1, 2021
and ending Dec. 31, 2021
Fiscal year beginning Sept. 1, 2020
and ending Aug. 31, 2021
Calendar year 2021

Qualifying Property
The following is a brief description of qualifying
property. For more detailed information, call the Tax
Commission at (208) 334-7660 in the Boise area or
toll free at (800) 972-7660.
General Information
The QIE is available only on property that qualifies
for the Idaho ITC. Idaho generally follows the
definition of qualified investment credit property
found in the Internal Revenue Code (IRC) Sections
46 and 48 as in effect prior to 1986. The property
must be used in Idaho the first year it’s placed
in service.
Qualifying property generally includes:
•	 Tangible personal property – machinery and
equipment
•	 Other tangible property
‚	 Property used as an integral part of
manufacturing, production, extraction, or
‚	 Furnishing transportation, communications
or utility services, or
‚	 Research facilities and bulk storage facilities
used in connection with those businesses
•	 Elevators and escalators
•	 Single-purpose agricultural or horticultural
structures
•	 Qualified timber property
•	 Petroleum storage facilities
•	 Qualified broadband equipment as approved
by the Idaho Public Utilities Commission
Items that don’t qualify include:
•	 Buildings and their structural components
•	 Property used in certain lodging facilities
•	 Construction in progress
•	 The cost of property expensed
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Denial of QIE
If the QIE is denied for all or part of the market value
of any property, the county assessor will notify you
with the reason for the denial.

Specific Instructions
Heading
Enter the name that’s used on your personal property
declaration or operator’s statement.
Enter your Social Security number or your federal
Employer Identification Number, whichever is
applicable, in the space provided. If you were
included in a combined report, enter the name of the
corporation the Idaho income tax return is filed under
and its federal Employer Identification Number.
Loss in Second Preceding Tax Year
You must have had negative Idaho taxable income not
including net operating loss carryovers or carrybacks
in the second preceding tax year from the income
tax year you placed the property in service. In the
space provided, enter the last day of your income
tax year that ended in calendar year 2023. For
example, if you’re a calendar year taxpayer, enter
December 31, 2023. If you’re a fiscal year taxpayer,
enter the last day of the fiscal year that ended during
2023. If you had two income tax filing periods that
ended during 2023, enter both ending dates.
If during calendar year 2023 or the previous two
years you had a short-period tax year for income
tax purposes, include a statement that lists the
ending dates for each income tax filing period
during that two-year period. For example, if during
2022 you changed from filing income tax returns on
a calendar year basis to filing them on a June 30
year-end basis, include a schedule identifying the
tax year ending dates as December 31, 2021, and
June 30, 2022.

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Form 49E — Instructions

2023

(continued)

Listing of Property Elected
Designate each specific asset and its location
you’re claiming the QIE on. Group listings of assets
won’t be accepted. If you can’t list all the elected
assets on page 1, use additional copies of page 2
as needed.

If you didn’t use the asset in Idaho during the first year
the property was placed in service, the asset doesn’t
qualify. For example, if you purchased the asset in
2021 and used the asset outside of Idaho until moving
it to Idaho to use during 2023, the asset won’t qualify
for the QIE.

Asset Number
Enter the asset’s assigned identification number.

Qualifying Loss Year
Enter the beginning and ending dates of the qualifying
loss year. This must be the second preceding income
tax year from the income tax year in which the
property is placed in service.

Asset Description
Enter a description of the asset. The description
must be detailed enough to identify what the
property is and to determine if it qualifies. If the
make, model, or serial number isn’t available,
include other identifying information that will
describe the asset.
Asset Location
Enter the county where the asset is located. If the
property is used in more than one county, enter the
home county where the asset is located.
If you’re claiming the QIE on used property, notify
all counties where you’re claiming the QIE of the
amount of used property elected. You can do this in
one of two ways:
•	 Include copies of all Forms 49E that list used
property to the personal property declaration
sent to each county, or
•	 Complete a separate Form 49E that lists only
used property, and send that to each county
If you’re electing the QIE for property that’s
assessed as nonregulated operating property by
the Tax Commission, list on Form 49E every county
where each asset is located regardless of whether
the asset is new or used.
Date Placed in Service
Enter the date you placed the asset in service.
Property is placed in service in the earlier of:
•	 The income tax year in which, under
your depreciation practice, the period for
depreciation of the property begins, or
•	 The income tax year in which you placed
the property in a condition or state of
readiness and availability for a specifically
assigned function

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If you file your income tax returns on a calendar year
basis, and you didn’t have any short-period tax years
during the previous two years, enter January 1, 2021
to December 31, 2021. If you didn’t have negative
Idaho taxable income for 2021, you can’t make the
election on property placed in service during 2023.
If you file your income tax returns on a fiscal year
basis, or you had a short-period income tax year, you
may have two different qualifying loss years. Identify
the applicable qualifying loss year for each asset.
If you’re an S corporation or partnership, your net
business income apportioned to Idaho plus the
nonbusiness income or loss allocated to Idaho for the
second preceding income tax year must be negative.
New or Used
Indicate whether the asset is new or used.
Used Property
Qualifying used property is limited to a total cost of
$150,000 per income tax year, whether you claim
the QIE, the ITC, or a combination of both for that
year. In addition, you must have acquired the used
property by purchase. If you have used property in
excess of $150,000, you must select the specific
items on which to claim the QIE. If you select an
item, the entire cost must be taken into account
unless you’ve exceeded the $150,000 limit. If the
$150,000 used property limit is exceeded, the
remaining amount of an item selected and any
items not selected don’t qualify for the ITC. For
example, used assets A, B, C, and D, each costing
$70,000, were placed in service. Two of the assets
will qualify, and a third asset will partially qualify.
You must select which two items qualify and which

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Form 49E — Instructions

2023

(continued)

third item partially qualifies. If you claim the QIE
on assets A and B, you may claim a partial QIE on
either asset C or D, or you may claim the ITC on
asset C or D but only up to $10,000, the remaining
amount of the $150,000 used-property limitation.
Original Cost
Enter the asset’s original cost. This should be the
same amount you would list as the purchase price
on the Idaho Personal Property Declaration. Include
trade-in allowances and all associated costs to
acquire and prepare the item for its intended use.

Contact us:

In the Boise area: (208) 334-7660 | Toll free: (800) 972-7660
Hearing impaired (TDD) (800) 377-3529
tax.idaho.gov/contact
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