10-018 Code Vt. R. 10-060-018-X - INCOME TAX CREDIT FOR RENEWABLE ENERGY RESOURCES

Section 1.5921 DEFINITIONS

1.59211 "Qualifying Costs" shall mean amounts actually paid (or, in the case of a taxpayer who uses the accrual method of accounting for tax purposes, amounts actually incurred) for the purchase and installation of equipment forming all or part of the renewable energy system.

(a) "Qualifying Costs" shall include amounts paid for the purchase and installation of the principal components of such system, but shall not include costs of ordinary architectural components such as insulation, skylights, drapes or windows.

(b) "Qualifying Costs" shall not include any allowance for labor performed by the taxpayer.

1.59212 "Renewable Energy System" means a system which provides heating or cooling, generates electrical power or produces mechanical power by the use of solar, wood, hydro or wind power.

(a) "Renewable Energy System" shall not include a fireplace or similar device capable of being operated in an open configuration, or a wood stove.

(b) "Renewable Energy System" shall include a wood furnace which operates a central heating system, whether or not such furnace is capable of burning other fuel.

1.59213 "Resident Individual" means, for any taxable year, an individual qualifying for residency in this state for the entirety of that taxable year.

1.59214 "Completed Installation" means that the necessary components of the system are in place and operational.

1.59215 "Dwelling" means the building in Vermont used by the taxpayer as a regular place of abode.

1.59216 "Business Property" means real property in Vermont used primarily for the operation of the taxpayer's trade or business or held primarily for the production of income. Property used both as a dwelling and as business property shall be considered a dwelling unless more than 50% of the floor space qualifies as business property.

Section 1.5922 CREDIT FOR DWELLINGS

(a) Any resident individual taxpayer who completes installation of a renewable energy system for such taxpayer's dwelling between January 1, 1978, and July 1, 1983, shall be entitled to a credit against such taxpayer's Vermont income tax liability in an amount equal to 25% of the qualifying costs of such system, but in no event shall such credit exceed $ 1,000.

(b) Where a residence is owned by more than one person, the credit shall be divided among the owners according to their ownership share, but in no event shall the total of credits with respect to the installation of any one system exceed $ 1,000. A husband and wife owning a residence as tenants by the entirety or joint tenants may claim the entire credit on a joint return, or, if separate returns are filed, may divide the credit, but in no event shall the total credits exceed $ 1,000.

(c) Such tax credit shall be deducted from the taxpayer's income tax liability for the taxable year in which the installation of the renewable energy system was completed. If the amount of such tax credit exceeds the taxpayer's income tax liability for such taxable year, the amount thereof which exceeds such tax liability may be carried over for deduction from the taxpayer's income tax liability in the next succeeding taxable year or years until the total amount of the credit has been used. However, no such tax credit shall be carried over for deduction after the fourth taxable year succeeding the taxable year in which installation of the renewable energy system was completed.

Section 1.5923 TAX CREDITS FOR BUSINESSES

(a) Any taxpayer who completes installation of a renewable energy system upon business property located in this state between January 1, 1978, and July 1, 1983, shall be entitled to claim an income tax credit in an amount equal to 25% of the qualifying costs, or $ 3,000, whichever is less.

(b) A taxpayer who installs more than one renewable energy system may claim a credit in the amount of 25% of the total qualifying costs of all such systems, but in no event may the taxpayer claim a total credit of more than $ 3,000, for installations in a single year.

(c) Such tax credit shall be deducted from the taxpayer's tax liability for the taxable year in which the installation of such system is completed. If the amount of such tax credit exceeds the taxpayer's income tax liability for such taxable year, the amount thereof which exceeds such tax liability may be carried over for deduction from the taxpayer's income tax liability in the next succeeding taxable year or years until the total amount of the tax credit has been deducted from tax liability. However, no such tax credit shall be carried for deduction after the fourth taxable year succeeding the taxable year in which the renewable energy system was acquired.

(d) Credits earned by a partnership or a subchapter(s) corporation are to be passed through the individuals on the basis of their share of profits and losses as shown on Federal Schedule K1.

Section 1.5924 MISCELLANEOUS

(a) Taxpayers who install more than one system in a taxable year may claim a credit in the amount of 25% of the total costs of all such systems installed. However, where credits are claimed only for installations on dwellings, total credit claimed in any taxable year shall not exceed $ 1,000. Where all installations are on business property, the total credit claimed in any taxable year shall not exceed $ 3,000. Where credits are claimed for installations on both dwellings and business properties, the total credit claimed in any taxable year shall not exceed $ 4,000.

(b) Alterations to an existing renewable energy system shall be eligible for the credit in the year in which the alterations are completed and the qualifying costs are paid or accrued, if such alterations are in the nature of capital improvements and not repairs.

(c) The credit provided by 32 V.S.A. § 5922 or § 5923 shall reduce the taxpayer's tax obligation after the application of any credits provided by 32 V.S.A. § 5825 or § 5827, 5828(a) but before the credits provided by 32 V.S.A. § 5829 or § 5967.

(d) Public utilities regulated by the Public Service Board shall be ineligible for tax credits under this subchapter.

Notes

10-018 Code Vt. R. 10-060-018-X

Adopted: July 12, 1978
Effective Date: July 1978