43-1024 - Arizona Statutes

43-1024. Amortization of private commercial capital investment by qualified defense contractor A. A qualified defense contractor that is certified by the department of commerce under section 41-1508 may elect pursuant to this section to amortize the cost of any new device, machinery, equipment or other capital investment that is used exclusively for private commercial activities in this state. The period of amortization allowed by this section is equal to one-half of the time period allowed pursuant to the internal revenue code for the same class of property. In computing Arizona taxable income, the amortization is allowed as a subtraction ratably over the period allowed by this section beginning with the month in which the device, machinery, equipment or other capital investment is placed in exclusively private commercial service in this state. B. The taxpayer shall make the election under this section by an appropriate statement in the income tax return for the initial taxable year. The taxpayer may also elect to discontinue amortization with respect to the remainder of the amortization period by an appropriate statement in the income tax return for the taxable year in which the election to discontinue is made. C. In determining the adjusted basis for the purposes of subsection A of this section, the device, machinery, equipment or other capital investment shall include only an amount that is properly attributable to constructing, installing or acquiring the device, machinery, equipment or other investment as certified by the department of commerce. The taxpayer shall use the adjusted basis determined pursuant to this section in determining the gain on the sale or other disposition of a capital investment that is amortized under this section. D. The subtraction provided by this section is in lieu of any allowance for exhaustion, wear and tear of the property allowed by section 167 or 179 of the internal revenue code.