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Enterprise Zone Credit
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The Enterprise Zone Credit is a refundable credit available to qualifying businesses located in the Border-Cities Enterprise Zone.
If you qualify, you may receive:
- Property tax credits for new or expanded facilities
- Income tax credits for:
- Debt financing on new construction or expanded facilities
- Adding or retaining employees
- Sales tax exemption on construction equipment and materials
The credit is offered through the Border-Cities Enterprise Zone Program administered by the Minnesota Department of Employment and Economic Development (DEED).
For details on the credit, see Minnesota Statutes, section 469.171. If you have questions about the program, contact DEED.
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To qualify for the credit, your business must be a source of new investment and job creation, and have a positive impact on economic activity in one of these areas:
- The designated enterprise zone cities of:
- Breckenridge
- Dilworth
- East Grand Forks
- Moorhead
- Ortonville
- The development zone of Taylors Falls
You must apply for the credit by contacting the city’s enterprise zone administrator.
If you qualify for the credit, you will receive written certification from DEED. You must have this paperwork to claim the credit.
Businesses Excluded from the Credit
The Enterprise Zone Credit does not apply to:
- Recreation or entertainment facilities
- Property used in the operation of a financial institution
- Property of a public utility
- Property owned by a fraternal or veterans’ organization
- Retail food or beverage facility operating under a franchise agreement requiring the business to be in Minnesota
You must include a copy of your certification paperwork from DEED with your tax form.
Use this table to determine which form to claim the credit:
| IF YOU'RE FILING AS A | CLAIM THE CREDIT ON |
|---|
| C corporation | Form M4, Corporation Franchise Tax Return |
| Fiduciary | Form M2, Income Tax Return for Estates and Trusts |
| Partnership | One of these: - Form M3, Partnership Return
- Schedule KPI or KPC, Partner’s Share of Income, Credits and Modifications (if distributing the credit to partners)
|
| S corporation | One of these: - Form M8, S corporation Return
- Schedule KS, Shareholder’s Share of Income, Credits, and Modifications (if distributing to shareholders)
|
| Individual or Sole Proprietor | Schedule M1REF, Refundable Credits |
