Source: https://www.taxequitytimes.com/category/state-tax/
Timestamp: 2019-03-20 16:19:38
Document Index: 298845163

Matched Legal Cases: ['§ 14', '§ 14', '§ 14', '§ 14', '§ 14', '§ 10', '§ 14', '§ 14', '§ 14', '§ 14']

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By Guoyu Tao & Jeffrey G. Davis on November 27, 2018
Posted in State Tax, Storage
In 2017, Maryland, with Governor Larry Hogan’s (R) support, became the first state in the country to launch a tax credit program for energy storage systems. In September, 2018, Maryland Energy Administration adopted new regulations that clarified certain qualifications of eligible systems and established procedures for individuals and businesses to apply for tax credits.
The program will grant tax credits to taxpayers that install energy storage systems between January 1, 2018 and December 31, 2022. The amount of tax credits granted from this program will not exceed 30 percent of the total installed costs of the energy storage system. The amount of tax credits granted for a system installed on residential property is further capped at $5,000. The cap amount of a system installed on commercial property is $75,000. The tax credits will be granted on a first-come, first-served basis and are subject to a maximum limit of $750,000 each year. Unused credits from this program cannot be carried forward or backward to offset taxpayers’ tax liability in another taxable year. Please click here to read more on the original Senate Bill and our observations about the incentive tax credit program.
The regulations clarified that an energy storage system is a system that stores electrical, mechanical, chemical or thermal energy for use as electricity at a later date or to offset electricity use at peak times.[i]
The regulations set forth certain safety and operational requirements for qualifying systems. Qualifying systems must use equipment certified by a nationally recognized testing laboratory and must be installed in Maryland.[ii] If the system is an electric system, it must also be installed by a licensed electrician, be in compliance with all applicable building and fire codes and, if applicable, be compliant with Maryland regulations regarding interconnection with the electric utility grid.[iii]
Qualifications for these systems may be adjusted by the Administration across program years.[iv]
Both individual and business taxpayers can participate in this program.[v] Businesses must be formed as associations or joint-stock companies to be eligible.[vi] Taxpayers must provide information requested by the Administration in the application process. The Administration has the sole discretion in determining what information to request. Taxpayers may be asked to provide their names, addresses and contact information or those of their representatives, estimated gross income or revenue, estimated tax liabilities, physical addresses of the property, proof of ownership of the property, description of the proposed energy storage systems, explanation of how the proposed systems offset electricity when discharging, information on the developers or installers, whether the proposed systems will participate in wholesale energy markets, estimated costs of the proposed systems, expected life of the proposed systems, anticipated in-service dates of the proposed systems, anticipated capacity factor of the proposed systems, energy storage duration, the amount of energy that can be stored in the proposed systems, the rate of energy flux per unit of area of the proposed systems, documentation verifying that the proposed systems are in service, among other information.[vii]
Taxpayers that have already claimed a tax credit in this program are not eligible for additional tax credits from this program for the same taxable year.[viii] Addresses, including multifamily properties, where tax credits were already claimed in this program are ineligible for additional tax credits from this program in all taxable years.[ix] Electric vehicles are ineligible for this program.[x]
[i] Md. Regs. Code § 14.26.07.04(A).
[ii] Md. Regs. Code § 14.26.07.04(B), (C).
[iv] Md. Regs. Code § 14.26.07.04(D).
[v] See Md. Regs. Code § 14.26.07.01.
[vi] Md. Regs. Code § 14.26.07.03(B)(4); Md. Code Ann., Tax-General § 10-101(c).
[vii] Md. Regs. Code § 14.26.07.07(A).
[viii] Md. Regs. Code § 14.26.07.05(B).
[ix] Md. Regs. Code § 14.26.07.05(C).
[x] Md. Regs. Code § 14.26.07.05(D).
By David K. Burton, Amy Nogid & Isaac L. Maron on August 7, 2017
Posted in Property Tax, Solar, State Tax, Tax Cases
Our article AZ Companies Win Preferential Tax Treatment for Solar Panels was recently published in State Tax Notes. The article analyzes a favorable opinion by the Arizona Supreme Court in a case brought by SolarCity and SunRun. The Arizona Supreme Court that held that an Arizona law allowing taxpayers to attribute no value for property tax purposes to solar panels leased to customers did not violate the Arizona Constitution.
By Jeffrey G. Davis & Isaac L. Maron on May 16, 2017
Posted in ITC, Offshore Wind, Proposed Legislation, PTC, State Tax, Wind
On May 11, 2017, Senators Edward J. Markey (D-Mass.) and Sheldon Whitehouse (D-R.I.) introduced the Offshore Wind Incentives for New Development Act or, simply, the Offshore WIND Act (here). The Offshore WIND Act would extend the 30% investment tax credit (ITC) under Section 48 of the Internal Revenue Code (Code) for offshore wind through 2025. Continue Reading Wind in the Sails of Offshore Wind Farms: Recent Developments in Incentives for Offshore Wind Generation
By David K. Burton, Isaac L. Maron & Binyomin Koff on May 10, 2017
Posted in Energy Policy, Partnerships, State Tax, Storage, Tax Policy
On May 4, 2017, Maryland became the first state in the country to offer a tax credit for energy storage systems with Governor Larry Hogan’s (R) signing of Senate Bill No. 758 (available here).
The law provides a tax credit for certain costs of installing an energy storage system. Energy storage systems include systems used to store electrical energy, or mechanical, chemical, or thermal energy that was once electrical energy, for use as electrical energy at a later date or in a process that offsets electricity use at peak times. The tax credit is not limited to storage systems that are charged by renewable energy sources.[1] The tax credit is up to $5,000 for a system installed on a residential property and the lesser of $75,000 and 30 percent of the cost of the energy storage system for a system installed on a commercial property (which presumably would include a utility). The tax credit would apply to systems installed between January 1, 2018, and December 31, 2022. The tax credit may only be used to offset Maryland income tax liability (i.e., it cannot be applied against other types of Maryland taxes such as excise tax) and may not be carried forward to another taxable year. The law sets a limit of $750,000 on the aggregate tax credits issued to all taxpayers in a taxable year; such credits to be issued on a first-come, first-served basis. Continue Reading Maryland Enacts First in the Nation Energy Storage Tax Credit
Oklahoma State PTC Ends for Wind Projects Not Operating Prior to July 1, 2017
By Anne S. Levin-Nussbaum on April 27, 2017
Posted in Energy Policy, PTC, State Tax, Tax Policy
On April 17, 2017, Oklahoma Governor Mary Fallin signed into law House Bill No. 2298, which moves the deadline for a wind project to be operational to qualify for the state’s production tax credit for wind power to June 30, 2017 – three and a half years earlier than the December 31, 2020 deadline under prior law. The state’s tax credit is a $0.0050 per kilowatt-hour credit for electricity generated by eligible zero-emission facilities. The credit is available for 10 years from the date the project becomes operational and is refundable for up to 85 percent of its face amount. Eligible zero-emission facilities are those located in the state that produce electricity from wind, moving water, sun or geothermal energy, and have a rated capacity of one megawatt or greater. The bill does not change the sunset date for the credit for any type of eligible facility other than wind (i.e., the end date for solar, moving water and geothermal facilities remains at January 1, 2021). In addition, all existing wind farms and those that are operational before July 1 of this year will continue to receive the 10-year production credit under the same terms as previous law. Continue Reading Oklahoma State PTC Ends for Wind Projects Not Operating Prior to July 1, 2017
By David K. Burton & Binyomin Koff on March 14, 2017
Posted in Energy Policy, PTC, State Tax, Tax Policy, Wind
On March 9, 2017, Oklahoma’s House of Representatives passed H.B. 2298, which would end the Oklahoma production tax credit for wind energy production three and a half years earlier than current law. This measure was first proposed in Governor Fallin’s 2018 Executive Budget. See our prior coverage.
The bill provides a July 1, 2017 sunset date for wind facilities to be eligible for the zero-emission tax credits. Wind facilities must be placed in operation prior to that date to be eligible for the tax credits. The rate of the tax credit is unchanged at 0.5 cents per kilowatt-hour.
Interestingly, the early deadline only applies with respect to electricity generated by wind. The bill retains the original January 1, 2021 deadline for other zero-emission facilities, such as solar or geothermal facilities. However, the vast majority of zero-emission energy production in Oklahoma is from wind. Continue Reading Oklahoma House Votes for Early Sunset of State Wind PTC
By Anne S. Levin-Nussbaum on March 8, 2017
Posted in Capital Markets, Energy Policy, PACE, Solar, State Tax
“PACE” – Is it the new buzzword? Lately, it seems I keep hearing about securitizations backed by PACE financings. What is a PACE financing program, and what is happening in the securitization market?
“PACE” stands for Property Assessed Clean Energy. Under PACE programs, municipalities and counties form special tax districts to help residential, commercial or industrial property owners finance energy efficient upgrades or renewable energy installations to their properties through payments of additional property taxes. While the specific details vary by state, the basic premise is that the property owner is allowed to finance 100 percent of the cost of the energy property through increased property tax assessments – the “PACE” assessments. The PACE assessments are typically for 15 to 20 years and operate similar to loan payments in that these property tax payments repay the initial financing cost for the energy upgrade. The PACE assessments, however, are legally property tax assessments and, thus, have the benefit of being secured by senior liens against the taxpayer’s property.
The way the financing works is specific to the individual programs, but the funds typically come from some form of private / public partnership, which allows the state or municipality to encourage identified property upgrades to achieve environmental and energy efficiency goals without having to raise funding, and provides investors with new opportunities to invest in a secure asset in the green energy space. The benefit to the property owner is typically the ability to realize immediate cost savings in reduced energy costs while paying for the improvement over a 15 to 20 year period, and also being able to finance 100 percent of the cost. Continue Reading “PACE” for Residential and Commercial Renewable Energy Projects – What is it?
By David K. Burton & Binyomin Koff on March 1, 2017
Posted in PTC, State Tax, Tax Policy, Wind
Oklahoma governor Mary Fallin (R) recently released her proposed 2018 Executive Budget, which includes two new anti-wind tax proposals.[1] The first proposal would end the zero-emission tax credit for wind facilities placed in service after 2017. The second proposal would begin taxing the production of wind energy at $0.005 per KwH produced.
Oklahoma is facing a budget shortfall that has been projected to be nearly $900 million. One of the primary causes of the revenue shortfall is less tax revenue due to low oil prices and an increase in wind energy production resulting in greater tax credits. Governor Fallin’s tax proposals would reduce the amount of tax credits available for wind energy production and increase revenue by imposing a new production tax of electricity generated by wind.[2] Continue Reading Oklahoma Gov. Proposes New Tax on Wind, Early End to Wind Tax Credits
State Tax Credit Presentation
By David K. Burton on June 8, 2016
Posted in Energy Policy, ITC, Leasing, Partnerships, State Tax
Below is a link to my presentation addressing state tax credits to Tax Executives International’s New Orleans chapter. The presentation (i) discusses the federal tax treatment of state tax credits, (ii) outlines several transaction structures involving both state tax credits and the federal investment tax credit and (iii) provides an overview of renewable energy state tax credit opportunities in various states.
Here’s a link to the presentation: State-Tax-Credits-TEI-NOLA-Presentation-5-17-16.pdf
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Strafford live webinar: “Tax Reform & Renewable Energy: Planning Techniques” on January 16