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INSTRUCTIONS FOR SCHEDULE RZ OF BC-1040
RENAISSANCE ZONE DEDUCTION
GENERAL INFORMATION
Four geographic areas within Battle Creek were designated as Renaissance
Zones (zones 1 thru 4 – beginning January 1, 2001 ending December 31,
2015). This designation grants tax relief to a qualified taxpayer. In
conjunction with the designation of these zones, the Battle Creek Income
Tax Ordinance was amended, effective January 1, 1997, to include a A. Adjust the basis for the property to the fair market value on the
Renaissance Zone deduction. qualification date (the prior days closing price for traded
WHO MAY CLAIM A RENAISSANCE ZONE DEDUCTION securities) and subtract the basis from the sale proceeds; or
A qualified resident of Battle Creek domiciled in a Renaissance Zone for B. Divide the number of months the property was held since the
183 consecutive days and qualified resident and nonresident individuals qualification date by the total number of months the property was
with income from rental real estate, business, profession or other activity held and apply this fraction to the gain reported for the property
located and doing business in a Renaissance Zone. on the federal income tax return.
HOW TO CLAIM A RENAISSANCE ZONE DEDUCTION
To claim a Renaissance Zone deduction, a taxpayer must file a Battle
Creek income tax return and attach a completed Schedule RZ of the BC- Line 14. Enter lottery winnings from instant games or on-line games won
1040. after the qualification date listed on line 2.
RENAISSANCE ZONE DEDUCTION DISQUALIFIERS INDIVIDUALS WITH INCOME FROM RENTAL REAL ESTATE,
A person is not eligible to claim a Renaissance Zone deduction if: BUSINESS, PROFESSION OR PARTNERSHIP
1. The person is delinquent in filing or paying any of the following state or For this section of Schedule RZ residents are to use the resident column
local taxes: Michigan single business tax, Michigan income tax, city and nonresidents are to use the nonresident column. A part-year resident is
income tax, Act 198 industrial abatement tax, commercial abatement tax, to divide each line item and report the resident and nonresident portions
enterprise zone tax, city utility tax or general property taxes. accordingly.
2. The person owns residential rental property and did not file an affidavit Line 16. List the business name, D.B.A., and the address of each location
with the Battle Creek City Treasurer’s Office by December 31 of the prior within a Renaissance Zone.
tax year attesting that the property is in compliance with all applicable Line 17. Enter the business and farm income reported on BC-1040.
state and local zoning, building and housing laws or codes. Line 18. Enter the net operating loss deduction claimed on BC-1040.
A business owner is subject to the above disqualifiers and not eligible to Line 19. Enter the retirement plan deduction claimed on BC-1040 related
claim a Renaissance Zone deduction if the business: to income on line 17 of this form.
1. Is located within Battle Creek outside of a Renaissance Zone and moves Line 21. The Renaissance Zone apportionment percentage is used by
to a location within a Renaissance Zone in Battle Creek without approval companies doing business in Battle Creek inside a Renaissance
of the City. Zone and outside the Renaissance Zones. If the business
2. Relocates more than 25 full-time equivalent jobs from one or more non- income is 100% within the Renaissance Zones, enter 100% on
Renaissance Zone local governmental units (city, village or township) line 21f and complete the form from there.
and any of the government units from which a job was relocated adopts a Line 21a. In column 1 enter the average net book value of all real and
resolution objecting to the relocation within 60 days of being notified of tangible personal property owned and located in Battle Creek. In
the job relocation by the business. Column 2 enter the average net book value of the real and
RESIDENT DOMICILED IN A RENAISSANCE ZONE tangible personal property owned and located in a Battle Creek
DOMICILE DEFINED: Domicile is the place where a person has his or her Renaissance Zone. The average net book value of real and
true, fixed and permanent home and principal establishment, to which, tangible personal property may be determined by adding the net
whenever absent therefrom, he or she intends to return. book value at the beginning of the year to the net book value at
QUALIFICATION DATE: A resident domiciled in a Renaissance Zone for the end of the year and dividing the sum by two, or if the business
the required 183 consecutive days becomes a qualified taxpayer as of the was located in the Renaissance Zone for less than a year, on a
first day of domicile. monthly average basis.
DEDUCTIBLE INCOME: Income earned or received during the period of Line 21b. Enter in column 1 the gross annual rent multiplied by 8 for all
domicile in a Renaissance Zone may be deducted except the following: rented real property located in Battle Creek. In column 2 show
Lottery winnings from an instant game or on-line game won before the gross annual rent multiplied by 8 for rented real property
becoming a qualified taxpayer; the portion of gains from the sale or located in a Battle Creek Renaissance Zone.
exchange of property occurring before the qualification date; and income Line 21c. Total column 1 and column 2. In column 3 enter the percentage
from illegal activities. (column 2 divided by column 1).
INDIVIDUAL WITH INCOME FROM RENTAL REAL Line 21d. Enter in column 1 compensation paid to employees for work or
services performed within Battle Creek. In column 2 enter
ESTATE, A BUSINESS, A PROFESSION OR A compensation paid to employees for work or services performed
PARTNERSHIP LOCATED AND DOING BUSINESS IN A within a Battle Creek Renaissance Zone. In column 3 enter the
RENAISSANCE ZONE percentage (column 2 divided by column 1).
INCOME QUALIFIED FOR RENAISSANCE ZONE DEDUCTION Line 23. Enter the Renaissance Zone deduction from a partnership. Be
1. That portion of business or professional income from business activity in certain to enter the partnership Federal Employer Identification
a Renaissance Zone after adjustment for any net operating loss Number (FEIN). If a person has a Renaissance Zone deduction
deduction and retirement plan deduction. The Renaissance Zone portion from more than one partnership, attach a schedule providing
of business activity is determined via a two-factor apportionment formula, necessary data. Adjust for any retirement plan deduction claimed
property and payroll within a Battle Creek Renaissance Zone to that in on BC-1040, line 3 based on partnership income included in line
Battle Creek. 23.
2. Income from rental of real property located in a Renaissance Zone. Line 24. Enter the address for each parcel of rental residential real estate
located in a Renaissance Zone.
3. The partner’s share of partnership income from business activity in a Line 25. Enter the income from rental real estate located in a Renaissance
Renaissance Zone. Zone.
RESIDENTS DOMICILED IN A RENAISSANCE ZONE Line 26. Enter the total of lines 22, 23 and 25. Also enter this total on line
Line 3. Enter address of domicile in the Renaissance Zone. 3 of the BC-1040 form.
Line 4. Enter the date domicile was established at residence on line 3. ASSISTANCE
Line 5. Enter the starting and ending dates of domicile in the Renaissance If you have questions or need assistance, contact the Battle Creek Income
Zone this year and the total number of days domiciled. Tax Department by phone at (269) 966-3345 or by mail send to PO Box
Line 6. Divide the number of days on line 5 by 365, and enter the 1657, Battle Creek, Michigan 49016.
percentage. WEBSITE
Line 7. Enter gross net income (BC-1040, lines 1, 2 & 3 netted) Income tax forms, instructions and additional information are available
Line 13. Determine the portion of capital gains (not including capital losses) under the Income Tax Department section of the City of Battle Creek
from sale or exchange of property reported on BC-1040, line 2 that website, www.battlecreek.org.
occurred after the qualification date listed on line 4 and enter the
amount. Attach a schedule showing the computation. The
allowable Renaissance Zone deduction for capital gains may be
determined by one of the following methods:
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