2023 Utah Code › Title 59 - Revenue and Taxation › Chapter 10 - Individual Income Tax Act › Part 11 - Refundable Tax Credit Act › Section 1106 - Refundable renewable energy systems tax credits -- Definitions -- Certification -- Rulemaking authority.

Effective 5/3/2023
59-10-1106.
Refundable renewable energy systems tax credits -- Definitions -- Certification -- Rulemaking authority.
(1) As used in this section:
(a) "Active solar system" means the same as that term is defined in Section 59-10-1014.
(b) "Biomass system" means the same as that term is defined in Section 59-10-1014.
(c) "Commercial energy system" means the same as that term is defined in Section 59-7-614.
(d) "Commercial enterprise" means the same as that term is defined in Section 59-7-614.
(e) "Commercial unit" means the same as that term is defined in Section 59-7-614.
(f) "Direct use geothermal system" means the same as that term is defined in Section 59-10-1014.
(g) "Geothermal electricity" means the same as that term is defined in Section 59-10-1014.
(h) "Geothermal energy" means the same as that term is defined in Section 59-10-1014.
(i) "Geothermal heat pump system" means the same as that term is defined in Section 59-10-1014.
(j) "Hydroenergy system" means the same as that term is defined in Section 59-10-1014.
(k) "Hydrogen production system" means the same as that term is defined in Section 59-7-614.
(l) "Office" means the Office of Energy Development created in Section 79-6-401.
(m) "Passive solar system" means the same as that term is defined in Section 59-10-1014.
(n) "Principal recovery portion" means the same as that term is defined in Section 59-10-1014.
(o) "Wind system" means the same as that term is defined in Section 59-10-1014.
(2) A claimant, estate, or trust may claim an energy system tax credit as provided in this section against a tax due under this chapter for a taxable year.
(3)
(a) Subject to the other provisions of this Subsection (3), a claimant, estate, or trust may claim a refundable tax credit under this Subsection (3) with respect to a commercial energy system if:
(i) the commercial energy system does not use:
(A) wind, geothermal electricity, solar, or biomass equipment capable of producing a total of 660 or more kilowatts of electricity; or
(B) solar equipment capable of producing 2,000 or more kilowatts of electricity;
(ii) the claimant, estate, or trust purchases or participates in the financing of the commercial energy system;
(iii)
(A) the commercial energy system supplies all or part of the energy required by commercial units owned or used by the claimant, estate, or trust; or
(B) the claimant, estate, or trust sells all or part of the energy produced by the commercial energy system as a commercial enterprise;
(iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust claims a tax credit under this Subsection (3); and
(v) the claimant, estate, or trust obtains a written certification from the office in accordance with Subsection (7).
(b)
(i) Subject to Subsections (3)(b)(ii) through (iv), the tax credit is equal to 10% of the reasonable costs of the commercial energy system.
(ii) A tax credit under this Subsection (3) may include installation costs.
(iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (3) for the taxable year in which the commercial energy system is completed and placed in service.
(iv) The total amount of tax credit a claimant, estate, or trust may claim under this Subsection (3) may not exceed $50,000 per commercial unit.
(c)
(i) Subject to Subsections (3)(c)(ii) and (iii), a claimant, estate, or trust that is a lessee of a commercial energy system installed on a commercial unit may claim a tax credit under this Subsection (3) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax credit.
(ii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim as a tax credit under this Subsection (3) only the principal recovery portion of the lease payments.
(iii) A claimant, estate, or trust described in Subsection (3)(c)(i) may claim a tax credit under this Subsection (3) for a period that does not exceed seven taxable years after the day on which the lease begins, as stated in the lease agreement.
(4)
(a) Subject to the other provisions of this Subsection (4), a claimant, estate, or trust may claim a refundable tax credit under this Subsection (4) with respect to a commercial energy system if:
(i) the commercial energy system uses wind, geothermal electricity, or biomass equipment capable of producing a total of 660 or more kilowatts of electricity;
(ii)
(A) the commercial energy system supplies all or part of the energy required by commercial units owned or used by the claimant, estate, or trust; or
(B) the claimant, estate, or trust sells all or part of the energy produced by the commercial energy system as a commercial enterprise;
(iii) the claimant, estate, or trust has not claimed and will not claim a tax credit under Subsection (6) for hydrogen production using electricity for which the claimant, estate, or trust claims a tax credit under this Subsection (4); and
(iv) the claimant, estate, or trust obtains a written certification from the office in accordance with Subsection (7).
(b)
(i) Subject to Subsection (4)(b)(ii), a tax credit under this Subsection (4) is equal to the product of:
(A) 0.35 cents; and
(B) the kilowatt hours of electricity produced and used or sold during the taxable year.
(ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (4) for production occurring during a period of 48 months beginning with the month in which the commercial energy system is placed in commercial service.
(c) A claimant, estate, or trust that is a lessee of a commercial energy system installed on a commercial unit may claim a tax credit under this Subsection (4) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax credit.
(5)
(a) Subject to the other provisions of this Subsection (5), a claimant, estate, or trust may claim a refundable tax credit as provided in this Subsection (5) if:
(i) the claimant, estate, or trust owns a commercial energy system that uses solar equipment capable of producing a total of 660 or more kilowatts of electricity;
(ii)
(A) the commercial energy system supplies all or part of the energy required by commercial units owned or used by the claimant, estate, or trust; or
(B) the claimant, estate, or trust sells all or part of the energy produced by the commercial energy system as a commercial enterprise;
(iii) the claimant, estate, or trust does not claim a tax credit under Subsection (3);
(iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under Subsection (6) for hydrogen production using electricity for which a taxpayer claims a tax credit under this Subsection (5); and
(v) the claimant, estate, or trust obtains a written certification from the office in accordance with Subsection (7).
(b)
(i) Subject to Subsection (5)(b)(ii), a tax credit under this Subsection (5) is equal to the product of:
(A) 0.35 cents; and
(B) the kilowatt hours of electricity produced and used or sold during the taxable year.
(ii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (5) for production occurring during a period of 48 months beginning with the month in which the commercial energy system is placed in commercial service.
(c) A claimant, estate, or trust that is a lessee of a commercial energy system installed on a commercial unit may claim a tax credit under this Subsection (5) if the claimant, estate, or trust confirms that the lessor irrevocably elects not to claim the tax credit.
(6)
(a) A claimant, estate, or trust may claim a refundable tax credit as provided in this Subsection (6) if:
(i) the claimant, estate, or trust owns a hydrogen production system;
(ii) the hydrogen production system is completed and placed in service on or after January 1, 2022;
(iii) the claimant, estate, or trust sells as a commercial enterprise, or supplies for the claimant's, estate's, or trust's own use in commercial units, the hydrogen produced from the hydrogen production system;
(iv) the claimant, estate, or trust has not claimed and will not claim a tax credit under Subsection (3), (4), or (5) for electricity used to meet the requirements of this Subsection (6); and
(v) the claimant, estate, or trust obtains a written certification from the office in accordance with Subsection (7).
(b)
(i) Subject to Subsections (6)(b)(ii) and (iii), a tax credit under this Subsection (6) is equal to the product of:
(A) $0.12; and
(B) the number of kilograms of hydrogen produced during the taxable year.
(ii) A claimant, estate, or trust may not receive a tax credit under this Subsection (6) for more than 5,600 metric tons of hydrogen per taxable year.
(iii) A claimant, estate, or trust is eligible to claim a tax credit under this Subsection (6) for production occurring during a period of 48 months beginning with the month in which the hydrogen production system is placed in commercial service.
(7)
(a) Before a claimant, estate, or trust may claim a tax credit under this section, the claimant, estate, or trust shall obtain a written certification from the office.
(b) The office shall issue a claimant, estate, or trust a written certification if the office determines that:
(i) the claimant, estate, or trust meets the requirements of this section to receive a tax credit; and
(ii) the commercial energy system or the hydrogen production system with respect to which the claimant, estate, or trust seeks to claim a tax credit:
(A) has been completely installed;
(B) is a viable system for saving or producing energy from renewable resources; and
(C) is safe, reliable, efficient, and technically feasible to ensure that the commercial energy system or the hydrogen production system uses the state's renewable and nonrenewable resources in an appropriate and economic manner.
(c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the office may make rules:
(i) for determining whether a commercial energy system or a hydrogen production system meets the requirements of Subsection (7)(b)(ii); and
(ii) for purposes of a tax credit under Subsection (3), establishing the reasonable costs of a commercial energy system, as an amount per unit of energy production.
(d) A claimant, estate, or trust that obtains a written certification from the office shall retain the certification for the same time period a person is required to keep books and records under Section 59-1-1406.
(e) The office shall submit to the commission an electronic list that includes:
(i) the name and identifying information of each claimant, estate, or trust to which the office issues a written certification; and
(ii) for each claimant, estate, or trust:
(A) the amount of the tax credit listed on the written certification; and
(B) the date the commercial energy system or the hydrogen production system was installed.
(8) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commission may make rules to address the certification of a tax credit under this section.
(9) A tax credit under this section is in addition to any tax credits provided under the laws or rules and regulations of the United States.
(10) A purchaser of one or more solar units that claims a tax credit under Section 59-10-1024 for the purchase of the one or more solar units may not claim a tax credit under this section for that purchase.
(11) A claimant, estate, or trust may not claim or carry forward a tax credit described in this section in a taxable year during which the claimant, estate, or trust claims or carries forward a tax credit under Section 59-10-1029.
Amended by Chapter 482, 2023 General Session