Last week, the North Carolina State Senate introduced a bill
that seeks to extend renewable-energy tax credits applicable to
eligible property -- which is defined as specific "machinery
and equipment or real property" -- that is placed into service
before the end of the calendar year 2020, at which point the
proposed credit sunsets. The bill is SB 447.
The tax credit is equal to 35% of the "costs" of the
renewable energy property. The credit is not available
"to the extent the cost of the renewable energy property was
provided by public funds", excluding "grants made under
section 1603 of the American 25 Recovery and Reinvestment Tax Act
of 2009".
In terms of when the credit is to be taken, in terms of
"taxable year", there are limits depending on whether the
property is for business purposes or nonbusiness purposes. In
the case of renewable energy property that serves a
nonbusiness purpose, the credit must be taken for
the taxable year in which the property is placed in service. For
all other renewable energy property, the entire
credit may not be taken for the taxable year in which the property
is placed in service but must be taken in five equal
installments beginning with the taxable year in which the property
is placed in service.
The proposed law is entitled the Energy Investment Act, and is
expected to meet a companion bill from the North Carolina State
House.
Assuming a bill close to SB 447's current form comes out of the
General Assembly, it is unclear how the Governor will react.
We are reminded that the Governor's proposed budget is
favorable to tax treatment as to some renewable energy
technologies, but notably excluding solar energy.
"It's hooked up to my toaster. So, I'm going to claim a tax credit. Abs and money; what else is there?"
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