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An individual or business may take a credit
of 5% of the interest income received from a qualified
loan made to a zone business or resident. The loan must
apply to purposes directly related to the business or
increase the assessed value of real property in the
zone, including residential property. Home purchase
loans and loans for repairs may not qualify.
Location
The lender does not need to be located in the zone to
claim their benefits.
Registration
The lender must register with the State Urban
Enterprise Zone Board and the Lafayette Urban Enterprise
Association to claim benefits. To register, the lender
must file a registration form (Form EZB-R) by May 31
of each year and pay a participation fee. The participation
fee is a percentage of the tax benefits claimed. The
participation fee for the LUEA is 35% of total zone
tax savings. The lender must also pay a percentage (1%)
to the State Urban Enterprise Zone Board if the zone
tax benefits claimed exceed $1,000.
How
to claim this benefit...
It applies against a number of tax liabilities including
gross income tax, adjusted gross income tax (excluding
any county income tax), supplemental net income tax,
insurance premiums tax, and financial institution franchise
tax. Complete Schedule LIC and attach to individual
or corporate tax return.
Requirements
The investor does not need to be a zone resident or
have a business in the zone but must be investing in
or loaning money to a zone business or resident for
purposes mentioned above. Certain reinvestment requirements
may apply. Contact LUEA
for details.
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