HRS § 235-12.5 — Renewable energy technologies; income tax credit


House Bill
§235-12.5 Renewable energy technologies; income
tax credit. (a) Each individual or corporate taxpayer that files an
individual or corporate net income tax return for a taxable year may claim a
tax credit under this section against the Hawaii state individual or corporate
net income tax. The tax credit may be claimed for every eligible renewable
energy technology system that is installed and placed in service in the State
by a taxpayer during the taxable year. The tax credit may be claimed as
follows:
(1) For each solar energy
system: thirty-five per cent of the actual cost or the cap amount determined
in subsection (b); provided that:
(A) For taxable years beginning after
December 31, 2019, and except as provided in subparagraphs (B) and (C), no tax
credit may be claimed for a solar energy system that is five megawatts in total
output capacity or larger and requires a power purchase agreement approved by
the public utilities commission;
(B) A solar energy system that is five
megawatts in total output capacity or larger, installed and placed in service
pursuant to a power purchase agreement approved or pending approval by a
decision and order by the public utilities commission prior to December 31,
2019, shall continue to receive a tax credit equal to thirty-five per cent of
the actual cost, or $500,000 per solar energy system that has a total output
capacity of at least one thousand kilowatts per system of direct current,
whichever is less; and
(C) For each solar energy system integrated
with a pumped hydroelectric energy storage system, the tax credit may be
claimed for thirty-five per cent of the actual cost or the cap amount
determined in subsection (b), whichever is less; provided that applicable
project approval filings have been made to the public utilities commission by
December 31, 2021; or
(2) For each wind-powered energy system: twenty per
cent of the actual cost or the cap amount determined in subsection (b),
whichever is less;
provided further that multiple owners of a single
system shall be entitled to a single tax credit; and provided further that the
tax credit shall be apportioned between the owners in proportion to their
contribution to the cost of the system.
In the case of a partnership, S corporation,
estate, or trust, the tax credit allowable is for every eligible renewable
energy technology system that is installed and placed in service in the State
by the entity. The cost upon which the tax credit is computed shall be
determined at the entity level. Distribution and share of credit shall be
determined pursuant to administrative rule.
(b) The amount of credit allowed for each eligible
renewable energy technology system shall not exceed the applicable cap amount, which
is determined as follows:
(1) If the primary purpose of the solar energy system
is to use energy from the sun to heat water for household use, then the cap amounts
shall be:
(A) $2,250 per system for single-family residential
property;
(B) $350 per unit per system for multi-family
residential property; and
(C) $250,000 per system for commercial property;
(2) For all other solar energy systems, the cap amounts
shall be:
(A) $5,000 per system for single-family residential
property; provided that if all or a portion of the system is used to fulfill the
substitute renewable energy technology requirement pursuant to section 196-6.5(a)(3),
the credit shall be reduced by thirty-five per cent of the actual system cost or
$2,250, whichever is less;
(B) $350 per unit per system for multi-family
residential property; and
(C) $500,000 per system for commercial property;
and
(3) For all wind-powered energy systems, the cap amounts
shall be:
(A) $1,500 per system for single-family residential
property; provided that if all or a portion of the system is used to fulfill the
substitute renewable energy technology requirement pursuant to section 196-6.5(a)(3),
the credit shall be reduced by twenty per cent of the actual system cost or $1,500,
whichever is less;
(B) $200 per unit per system for multi-family
residential property; and
(C) $500,000 per system for commercial property.
(c) For the purposes of this section:
"Actual cost" means costs related to the
renewable energy technology systems under subsection (a), including accessories
and installation, but not including the cost of consumer incentive premiums unrelated
to the operation of the system or offered with the sale of the system and costs
for which another credit is claimed under this chapter.
"Household use" means any use to which
heated water is commonly put in a residential setting, including commercial application
of those uses.
"Renewable energy technology system" means
a new system that captures and converts a renewable source of energy, such as solar
or wind energy, into:
(1) A usable source of thermal or mechanical energy;
(2) Electricity; or
(3) Fuel.
"Solar or wind energy system" means any
identifiable facility, equipment, apparatus, or the like that converts solar or
wind energy to useful thermal or electrical energy for heating, cooling, or reducing
the use of other types of energy that are dependent upon fossil fuel for their generation.
(d) For taxable years beginning after December
31, 2005, the dollar amount of any utility rebate shall be deducted from the cost
of the qualifying system and its installation before applying the state tax credit.
(e) The director of taxation shall prepare any
forms that may be necessary to claim a tax credit under this section, including
forms identifying the technology type of each tax credit claimed under this section,
whether for solar or wind. The director may also require the taxpayer to furnish
reasonable information to ascertain the validity of the claim for credit made under
this section and may adopt rules necessary to effectuate the purposes of this section
pursuant to chapter 91.
(f) If the tax credit under this section exceeds
the taxpayer's income tax liability, the excess of the credit over liability may
be used as a credit against the taxpayer's income tax liability in subsequent years
until exhausted, unless otherwise elected by the taxpayer pursuant to subsection
(g) or (h). All claims for the tax credit under this section, including amended
claims, shall be filed on or before the end of the twelfth month following the close
of the taxable year for which the credit may be claimed. Failure to comply with
this subsection shall constitute a waiver of the right to claim the credit.
(g) For solar energy systems, a taxpayer may elect
to reduce the eligible credit amount by thirty per cent and if this reduced amount
exceeds the amount of income tax payment due from the taxpayer, the excess of the
credit amount over payments due shall be refunded to the taxpayer; provided that
tax credit amounts properly claimed by a taxpayer who has no income tax liability
shall be paid to the taxpayer; and provided further that no refund on account of
the tax credit allowed by this section shall be made for amounts less than $1.
The election required by this subsection shall be
made in a manner prescribed by the director on the taxpayer's return for the taxable
year in which the system is installed and placed in service. A separate election
may be made for each separate system that generates a credit. An election once
made is irrevocable.
(h) Notwithstanding subsection (g), for any renewable
energy technology system, an individual taxpayer may elect to have any excess of
the credit over payments due refunded to the taxpayer, if:
(1) All of the taxpayer's income is exempt from taxation
under section 235-7(a)(2) or (3); or
(2) The taxpayer's adjusted gross income is $20,000 or
less (or $40,000 or less if filing a tax return as married filing jointly);
provided that tax credits properly claimed by a taxpayer
who has no income tax liability shall be paid to the taxpayer; and provided further
that no refund on account of the tax credit allowed by this section shall be made
for amounts less than $1.
A husband and wife who do not file a joint tax return
shall only be entitled to make this election to the extent that they would have
been entitled to make the election had they filed a joint tax return.
The election required by this subsection shall be
made in a manner prescribed by the director on the taxpayer's return for the taxable
year in which the system is installed and placed in service. A separate election
may be made for each separate system that generates a credit. An election once
made is irrevocable.
(i) No taxpayer shall be allowed a credit under
this section for the portion of the renewable energy technology system required
by section 196-6.5 that is installed and placed in service on any newly constructed
single-family residential property authorized by a building permit issued on or
after January 1, 2010.
(j) To the extent feasible, using existing resources
to assist the energy-efficiency policy review and evaluation, the department shall
assist with data collection on the following for each taxable year:
(1) The number of renewable energy technology systems
that have qualified for a tax credit during the calendar year by:
(A) Technology type; and
(B) Taxpayer type (corporate and individual);
and
(2) The total cost of the tax credit to the State during
the taxable year by:
(A) Technology type; and
(B) Taxpayer type.
(k) This section shall apply to eligible renewable
energy technology systems that are installed and placed in service on or after July
1, 2009.