NEIL ABERCROMBIE

FREDERICK D. PABLO

GOVERNORDIRECTOR OF TAXATIONBRIAN SCHATZ
LT. GOVERNORSTATE OF HAWAII

DEPARTMENT OF TAXATIONP.O. BOX 259
HONOLULU, HAWAII 96809

PHONE NO: (808) 587-1540
FAX NO: (808) 587-1560

November 16, 2012

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2012-14
Re:
Claiming of the Renewable Energy Technologies Income Tax Credit for Residential
Systems Installed and Placed in Service on or Before December 31, 2012
The Department of Taxation issued temporary administrative rules relating to the Renewable
Energy Technologies Income Tax Credit which apply to systems installed and placed in service
on or after January 1, 2013. Section 18-235-12.5-01T(a)(3) of these temporary administrative
rules states:“Installed and placed in service” means that the system is ready and available
for its specific use. With respect to systems installed for residential property,
all requirements will be completed and a system will be deemed to beinstalled and placed in service when: (1) The actual cost has been incurred; (2)all installation, including all related electrical work, has been completed; and(3) any required requests for inspection of the installation has been received
by the appropriate government agency. However, if the residential installation
fails to pass all the required inspections the credit is properly claimed in thetaxable year in which the system passes such inspection.
This definition of “installed and placed in service” also applies to single-family and multi-family
residential systems (collectively “residential systems”) which are installed and placed in service
on or before December 31, 2012. With respect to the third requirement, any request for arequired inspection must be received by the appropriate government agency on or before theclose of the taxable year in which the credit is to be claimed. For calendar year taxpayers,December 31 is the close of the taxable year.
If the system does not pass the required inspection that was requested in order to meet the thirdrequirement (as stated above), then the credit for that system must be claimed in the taxable year
in which the system successfully passes the inspection. For example, if a calendar year taxpayer
submits a required request for inspection that is received by the appropriate government agency
on December 31, 2012 and subsequently passes such inspection in 2013, then the credit isproperly claimed in the 2012 taxable year. However, if the system fails the inspection, anotherrequest for inspection is submitted and received by the appropriate government agency in 2013,
and the system passes inspection in 2013, the credit is properly claimed in the 2013 taxable year.
If the credit is properly claimed in the 2013 taxable year, the credit must be calculated in a

Department of Taxation Announcement No. 2012-14
November 16, 2012
Page 2 of 2

manner compliant with §§18-235-12.5-01T through 18-235-12.5-06T of the temporary
administrative rules. In order to be compliant, each system for which a credit is claimed mustmeet the applicable total output capacity requirement or one of the exceptions.
For more information on this issue, please contact the Technical Section at 808-587-1577 or bye-mail at Tax.Technical.Section@hawaii.gov.
/s/FREDERICK D. PABLO
Director of Taxation