(1)The following formulas will be used to calculate the present value of the tax credit for transfer purposes:
(a)For tax credits that may be claimed over 5 succeeding tax years, the formula is: Tax Credit Amount/[1 + (3(5 year Treasury yield rate) – 3 year net rate of change for the urban CPI for the west region)]^5 = Present Value
(b)For tax credits that may be claimed in one tax year the formula is: Tax Credit Amount/[1 + (2(2 year Treasury yield rate) – net rate of change for the urban CPI for the west region)]^1 = Present Value
(2)Using the formulas in (1)(a) and (b) of this rule, the department will review and recalculate the present value of the tax credit on a quarterly basis and will publish the results on the department’s web page. The department will use the rates in effect on the 15th of March, June, September and December to calculate the present value for the quarter beginning on the first of the following month.
(3)In the event of a deflationary environment, the department may adjust the formulas in section (1), by adding the urban CPI for the western region, to ensure the present value is less than the certified tax credit amount.
(4)If an applicant elects to transfer the tax credit, the pass-through amount is determined by the present value in effect on the date the department receives the complete application for preliminary certification or the complete informational filing. Amendments will not change the pass-through rate.
Rule 330-230-0130 — Pass-Through Amount,