ORS Chapter 316 — Personal Income Tax

ORS 316.116. Credit for alternative energy device; rules. (1)(a) A resident individual shall be allowed a credit against the taxes otherwise due under this chapter for costs paid or incurred for construction or installation of each of one or more alternative energy devices in or at a dwelling. (b) A credit against the taxes otherwise due under this chapter is not allowed for an alternative energy device that does not meet or exceed all applicable federal, state and local requirements for energy efficiency, including equipment codes, state and federal appliance standards, the state building code, specialty codes and any other standards. (2)(a) For each category one alternative energy device other than an alternative fuel device or an alternative energy device that uses solar radiation for domestic water heating or swimming pool heating, the credit allowed under this section may not exceed the lesser of 50 percent of the cost of the alternative energy device or $1,500, and shall be computed as follows: (A) For a category one alternative energy device that is not an alternative fuel device, the credit shall be based upon the first year energy yield of the alternative energy device that qualifies under ORS 469B.100 to 469B.118. The amount of the credit shall be the same whether for collective or noncollective investment. (B) For each category one alternative energy device for a dwelling, the credit shall be based upon the first year energy yield in kilowatt hours per year multiplied by 60 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating. (C) Except as provided in paragraph (c) of this subsection, for each category one alternative energy device used for swimming pool, spa or hot tub heating, the credit shall be based upon the first year energy yield in kilowatt hours per year multiplied by 15 cents. (b) For each alternative fuel device, the credit allowed under this section may not exceed the lesser of 50 percent of the cost of the alternative fuel device or $750. (c) For each category one alternative energy device that uses solar radiation for: (A) Domestic water heating, the credit allowed under this section shall be based upon 50 percent of the cost of the device or the first year energy yield in kilowatt hours per year multiplied by $2, whichever is lower, up to $6,000. (B) Swimming pool heating, the credit allowed under this section shall be based upon 50 percent of the cost of the device or the first year energy yield in kilowatt hours per year multiplied by 20 cents, whichever is lower, up to $2,500. (d)(A) For each category two alternative energy device that is a solar electric system or fuel cell system, the credit allowed under this section may not exceed the lesser of $3 per watt of installed output or $6,000. (B) For each category two alternative energy device that is a wind electric system, the credit allowed under this section may not exceed the lesser of $6,000 or the first year energy yield in kilowatt hours per year multiplied by $2. (3)(a) Notwithstanding subsection (2)(a), (c) or (d) of this section, the total amount of the credits allowed in any one tax year may not exceed the tax liability of the taxpayer or $1,500 for each alternative energy device, whichever is less. Unused credit amounts may be carried forward as provided in subsection (8) of this section, but may not be carried forward to a tax year that is more than five tax years following the first tax year for which any credit was allowed with respect to the category two alternative energy device that is the basis for the credit. (b) Notwithstanding subsection (2)(d) of this section, the total amount of the credit for each device allowed under subsection (2)(d) of this section may not exceed 50 percent of the total installed cost of the category two alternative energy device. (4) The State Department of Energy may by rule provide for a lesser amount of incentive for each type of alternative energy device as market conditions warrant. (5) To qualify for a credit under this section, all of the following are required: (a) The alternative energy device must be purchased, constructed, installed and operated in accordance with ORS 469B.100 to 469B.118 and a certificate issued thereunder. (b) The taxpayer who is allowed the credit must be the owner or contract purchaser of the dwelling or dwellings served by the alternative energy device or the tenant of the owner or of the contract purchaser and must: (A) Use the dwelling or dwellings served by the alternative energy device as a principal or secondary residence; or (B) Rent or lease, under a residential rental agreement, the dwelling or dwellings to a tenant who uses the dwelling or dwellings as a principal or secondary residence. (c) The credit must be claimed for the tax year in which the alternative energy device was purchased if the device is operational by April 1 of the next following tax year. (6) The credit provided by this section does not affect the computation of basis under this chapter. (7) The total credits allowed under this section in any one year may not exceed the tax liability of the taxpayer. (8) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayers tax liability for the next succeeding tax year. Any credit remaining unused in the next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter. (9) A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117. (10) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayers taxable year under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085. (11) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117. (12) Spouses in a marriage who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the contribution of each. However, a spouse living in a separate principal residence may claim the tax credit in the same amount as permitted a single person. (13) As used in this section, unless the context requires otherwise: (a) Collective investment means an investment by two or more taxpayers for the acquisition, construction and installation of an alternative energy device for one or more dwellings. (b) Noncollective investment means an investment by an individual taxpayer for the acquisition, construction and installation of an alternative energy device for one or more dwellings. (c) Taxpayer includes a transferee of a verification form under ORS 469B.106 (8). (14) Notwithstanding any provision of subsections (1) to (4) of this section, the sum of the credit allowed under subsection (1) of this section plus any similar credit allowed for federal income tax purposes may not exceed the cost for the acquisition, construction and installation of the alternative energy device. [1977 c.196 8; 1979 c.670 2; 1981 c.894 3; 1983 c.684 14; 1983 c.768 1; 1987 c.492 1; 1989 c.626 6; 1989 c.880 9,11; 1995 c.746 19; 1997 c.325 41; 1997 c.534 3; 1999 c.21 41; 1999 c.623 1; 2005 c.832 5; 2007 c.843 29; 2009 c.909 47; 2011 c.730 69; 2012 c.45 12; 2015 c.629 41; 2015 c.701 26,27; 2016 c.29 4] Note: Section 5a (1), chapter 832, Oregon Laws 2005, provides: Sec. 5a. (1) A taxpayer may not be allowed a credit under ORS 316.116 if the first tax year for which the credit would otherwise be allowed with respect to an alternative energy device begins on or after January 1, 2018. [2005 c.832 5a; 2007 c.843 35; 2009 c.913 12; 2011 c.83 16; 2011 c.730 67(1)] Note: Section 75, chapter 730, Oregon Laws 2011, provides: Sec. 75. The State Department of Energy may not issue certifications for more than $10 million in potential tax credits for third-party alternative energy device installations in any tax year. [2011 c.730 75] TAXATION OF NONRESIDENTS