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Renewable Energy Tax Credits
| Eligible Facilities: | Wind, biogas, biomass, methane gas, solar energy conversion facilities that are located in Iowa and owned (at least 51% interest) by any of the following: resident of Iowa; farm corporation; limited liability company; authorized trust; family farm corporation; family farm limited liability company; family, revocable, or testamentary trust; small business; electric cooperative association; cooperative corporation; or school district. |
| Sectors: | Commercial, Industrial, Residential, Institutional. |
| Amount: | 1.5 cts/kWh or $4.50/MMBtu (commercial heat, methane or biogas) or $1.44/MCF (hydrogen), for a term of up to ten years. |
| Maximum: | 90 MW wind; 10 MW other eligible technologies. |
| Expiration: | Facilities must be operational by 12/31/2010; certificates must be issued by 12/31/2020. This tax credit applies only to those facilities placed into service on or after July 1, 2005, meaning this tax credit is not retroactive. |
| Legislative Code: | SF 390 / Iowa Code 476C |
| Summary: | This legislation enacts a tax credit of 1.5 cents/kWh or $4.50/MMBtu or $1.44/MCF for electricity, commercial heat or gas sold by renewable energy facilities that are initially placed into service between 7/1/2005 and 12/31/2010. The tax credit is only available to the first 90 MW (nameplate) of wind projects and 10 MW (nameplate) of other renewable energy facilities.
A renewable energy facility must first submit an application for eligibility with the Iowa Utilities Board. If the application is approved, the facility must be operational within eighteen months, or the eligibility to recover this tax credit expires. If a facility loses approval, it may reapply if there are still tax credits remaining. Facilities that receive approval and are constructed within the eighteen months then apply for the actual tax credit certificates with the Iowa Utilities Board. Certificates are issued based upon the amount of electricity, hydrogen fuel, methane or other biogas, or heat for commercial purposes from an eligible renewable energy facility generated by an eligible renewable energy facility and sold to the purchaser of the renewable energy.
Either the producer or the purchaser may claim the tax credits, but the arrangement must be documented within the power purchase agreement. The tax credits may be transferred once to any person (the initial decision of ownership between the producer and purchaser does not count as a transfer). The tax credits are renewable each year (based on actual energy sold) for the first ten years of the project's operations. |
| Limitations: | One eligible owner may not own more than 2 facilities eligible for a tax credit. An eligible facility must have at least one owner for each 2.5 MW of nameplate generating capacity. A person who receives a tax credit under Iowa Code 476B is not eligible to also receive a tax credit under Iowa Code 476C. The tax credits may not be used for tax years prior to July 1, 2006. |
Contact:
John Pearce, Iowa Utilities Board
(515) 281-5679
John.Pearce@iub.state.ia.us
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Wind Energy Tax Credits
| Eligible Technologies: | Wind |
| Applicable Sectors: | Commercial, Industrial, Residential, Institutional. |
| Amount: | one cent/kWh, for a period of up to ten years. |
| Maximum: | 450 MW. |
| Expiration: | Facilities must be operational by 6/30/2008; certificates must be issued by 12/31/2020. This tax credit applies only to those facilities placed into service on or after July 1, 2005, meaning this tax is not retroactive. |
| Legislative Code: | HF882 / Iowa Code 476B. |
| Summary: | This legislation enacts a tax credit of one cent/kWh for wind energy facilities that are initially placed into service between 7/1/2005 and 6/30/2008. The tax credit is available to only the first 450 MW (nameplate) of qualified facilities. A qualified facility must first submit an application for eligibility with the Iowa Utilities Board. If the application is approved, the qualified facility must be operational within eighteen months, or the eligibility expires. If a qualified facility loses approval, it may reapply if there are still tax credits remaining.
Facilities that receive approval and are constructed within the eighteen months then apply for the actual tax credit certificates with the Iowa Utilities Board. Facilities must also receive approval of the board of supervisors of the county in which the qualified facility is located. The application for certificates must be submitted no later than the close of the owner's first taxable year for which the credit is to be applied.
Certificates are issued based upon the amount of electricity generated by qualified facility and sold to the purchaser of the renewable energy. Either the producer or the purchaser may claim the tax credits, but the arrangement must be documented within the power purchase agreement. The tax credits may be transferred once to any person (the initial decision of ownership between the producer and purchaser does not count as a transfer). The tax credits are renewable each year (based on actual energy sold) for the first ten years of the project's operations. |
| Limitations: | The tax credits may not be used for tax years prior to July 1, 2006. Projects that took advantage of the special property tax valuation or the sales tax exemption are not eligible for the production tax credit. |
Contact:
John Pearce, Iowa Utilities Board
(515) 281-5679
John.Pearce@iub.state.ia.us
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Local Option Special Assessment of Wind Energy Devices
| Eligible Technologies: | Wind |
| Applicable Sectors: | Commercial, Industrial, Residential |
| Amount: | local option |
| Max. Limit: | local option |
| Legislative Code: | Iowa Code 427B.26 |
| Summary: | This statute allows any city or county to pass an ordinance assessing wind energy conversion equipment at a special valuation for property tax purposes, beginning at zero percent of the net acquisition cost in the first assessment year and increasing annually by five percentage points to a maximum of thirty percent of the net acquisition cost in the seventh and succeeding years. If the City or County repeals the ordinance, the wind energy property shall be valued at the special rate until the end of the nineteenth assessment year following the first assessment year. The taxpayer must file for the special valuation by February 1 of the assessment year in which the wind system is first assessed for property tax purposes. If the ordinance has not been adopted or the taxpayer fails to file for the special valuation, the system shall be assessed under Iowa Code 428.24 to 428.29 and 441.21(8), which provide that the assessable and taxable value of property shall not increase with the new construction of wind or solar energy systems for five full years. |
Contact
Jim Moyle, Iowa Department of Revenue
(515) 281-7232
Jim.Moyle@iowa.gov
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Wind Energy Equipment Exemption
| Eligible Technologies: | Wind |
| Applicable Sectors: | Commercial, Residential |
| Amount: | 100 percent of project value |
| Max. Limit: | none |
| Legislative Code: | Iowa Code 423.3(54) |
| Summary: | This statute exempts from the state sales tax the total cost of wind energy equipment and all materials used to manufacture, install or construct wind energy systems. The exemption does not cover the sales taxes paid in purchasing equipment to construct a plant to manufacture wind systems. |
Contact
Jerry Hilton, Iowa Department of Revenue
(515) 281-5486
Jerry.Hilton@iowa.gov
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Wind Energy Replacement Generation Tax Exemption
| Eligible Technologies: | Wind |
| Amount: | Six hundredths of a cent per kWh |
| Legislative Code: | Iowa Code 437A.6 |
| Summary: | This statute exempts electricity generated by wind energy conversion property from the replacement generation tax, which is six hundredths of a cent per kilowatt-hour. |
Contact
Alan Harding, Iowa Department of Revenue
(515) 281-4782
Alan.Harding@iowa.gov
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