Investment Tax Credit

Investment Tax Credit means:
a credit or other debt instrument repealed by the Tax Reform Act of 1986. The regular investment credit was a credit or other debt instrument against tax liability for up to 10% of a taxpayer's investment in new “Section 38 property.” Such property generally included any tangible personal property and other tangible property (not including a building or its structural components) used as an integral part of manufacturing, production, or extraction, or for furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services. The credit also was available for up to $125,000 of the taxpayer's cost of used property placed in service during a taxable year.

The amount of credit was based on the accelerated cost recovery system recovery period to which the property was assigned. The 10% credit was allowed for 5-year property, 10-year property, and 15-year public utility property. For 3-year property, the credit was limited to 6%.

The investment tax credit later consists of the business energy investment credit, the reforestation credit, and the rehabilitation tax credit.