It is enacted by the General Assembly as follows:

SECTION 1. Sections 42-64.3-6 and 42-64.3-7 of the General Laws in Chapter 42-64.3 entitled "ENTERPRISE ZONES" are hereby amended to read as follows:

42-64.3-6. Business tax credits. -- A qualified business in an enterprise zone shall be allowed a credit against the tax imposed pursuant to chapters 11, 13 [except the taxation of tangible personal property under section 44-13-13], 14, 17 and 30 of title 44 as hereinafter provided:

(a) {DEL During the first five (5) years of zone designation a DEL} {ADD A ADD} credit equal to fifty percent (50%) of the total amount of wages as are paid to those enterprise job employees comprising the five percent (5%) new jobs referenced in section 42-64.3-3(d) {DEL the DEL}{ADD . The ADD} wages subject to the credit shall be reduced by any direct state or federal wage assistance {ADD paid to employers for such employee(s) ADD} in the taxable year. The maximum credit allowed per taxable year under the provisions of this subsection shall be ten thousand dollars, ($10,000) per employee. A taxpayer who takes this business tax credit shall not be eligible for the resident business owner modification pursuant to section 42-64.3-7.

(b) Any tax credit as hereinbefore provided in subdivision (a), shall not offset any tax liability in taxable years other than the year in which the taxpayer qualifies for the credit. The credit shall not reduce the tax below the minimum tax. Fiscal year taxpayers must claim the tax credit in the year into which the December 31st of the certification year falls. The credit shall be used to offset tax liability pursuant to the provisions of either chapters 11, 13, 14, 17 or 30 of title 44, but not more than one chapter.

(c) In the case of a corporation, the credit allowed under this section shall only be allowed against the tax of that corporation included in a consolidated return that qualifies for the credit and not against the tax of other corporations that may join in the filing of a consolidated tax return.

(d) In the case of multiple business owners, the credit hereinbefore provided in subdivision (a) shall be apportioned according to the ownership interests of the qualified business.

42-64.3-7. Resident business owner tax modification. -- (a) In computing his or her annual tax liability pursuant to the provisions of chapter 44-11 or 44-30 of the general laws, a domiciliary of an enterprise zone who owns and operates a qualified business facility in that zone and which business is not required to file under chapter 11, 13, 14 or 17 of title 44 may:

(1) {DEL During DEL} {ADD For ADD} the first three (3) years {DEL of operation within the zone, DEL} {ADD after certification, whether or not consecutive, ADD} deduct fifty thousand dollars ($50,000.00) per year as a modification reducing federal adjusted gross income; and

(2) {DEL During DEL} {ADD For ADD} the fourth and fifth years {DEL of operation within the zone, DEL} {ADD after certification, whether or not consecutive, ADD} deduct twenty five thousand dollars ($25,000.00) per year as a modification reducing federal adjusted gross income.

(b) Any modification as hereinbefore provided in subdivisions (1) and (2) of subsection (a), shall not be available in taxable years other than the year in which the taxpayer qualifies for tax modification.

(c) In the case of multiple business owners, the modifications hereinbefore provided in subdivisions (1) and (2) of subsection (a) shall be apportioned according to the ownership interests of the domiciliary owners of the qualified business.

(d) A taxpayer who elects this modification shall not be eligible for the business tax credits under section 42-64.3-6.

SECTION 2. This act shall take effect upon passage.