Tax Type
Individual Income Tax
Description
Purchases of conservation tillage equipment; Carry forwards
Topic
Credits
Date Issued
09-29-1997
September 29, 1997
Re: Request for Ruling: Individual Income Tax
Dear********
This will reply to your letter of September 4, 1997, in which you inquire about the proper procedure for the use of a conservation tillage tax credit for your client (the "Taxpayer") made available when a net operating loss carryback deduction reduces income and thereby creates an excess of the credit in the carryback year.
FACTS
The Taxpayer purchased conservation tillage equipment in 1993 and thereby became eligible for the conservation tillage credit provided by Code of Virginia § 58.1-334. For the taxable year ending December 31, 1996, the Taxpayer sustained a net operating loss which was carried back to 1993. Because the Taxpayer had used the conservation tillage tax credit to offset tax due in 1993, you request the proper utilization of the excess credit created by the deduction of the net operating loss carryback.
RULING
Code of Virginia § 58.1-334 provides an individual tax credit against the tax imposed by Code of Virginia § 58.1-320 in an amount equaling twenty-five percent of all expenditures made for the purchase and installation of "conservation tillage equipment." The amount of such credit shall not exceed $2,500 or the tax due, whichever is less. Any unused credit can be carried forward to the next five taxable years. Therefore, the Taxpayer may amend the 1994 return and use the excess credit against tax due for that year, or if there is no tax due, amend a later year within the five year carryover period after the credit was earned.
If you have any questions regarding this ruling, please contact *********of the Office of Tax Policy at ********* .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12948P
Rulings of the Tax Commissioner