| State: |
Arizona |
| Incentive Type: |
Corporate Tax Credit |
| Eligible Renewable/Other Technologies: |
Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Solar Cooling, Solar Pool Heating, Daylighting |
| Applicable Sectors: |
Commercial, Industrial, Nonprofit, Schools, Local Government, State Government, Tribal Government, Fed. Government, Agricultural, Institutional |
| Amount: | 10% of installed cost |
| Maximum Incentive: | $25,000 for any one building in the same year and $50,000 per business in total credits in any year |
| Eligible System Size: | No system size restrictions specified |
| Carryover Provisions: | Unused credit may be carried forward for not more than five consecutive taxable years |
| Program Budget: | $1 million annually |
| Program Start Date: | 1/1/2006 |
| Program Expiration Date: | 12/31/2018 |
| Web Site: |
http://www.azcommerce.com/BusAsst/Incentives/Solar+Energy+Tax+Inc...
|
Arizona’s tax credit for solar and wind installations in commercial and industrial applications was established in June 2006 (
HB 2429). In May 2007, the credit was revised by
HB 2491 to extend the credit to all non-residential entities, including those that are tax-exempt. Third parties who install or manufacture the system are now eligible as well -- not only those that finance a system as allowed in the original legislation. These provisions are retroactive to January 1, 2006.
The tax credit, which may be applied against corporate or personal taxes, is equal to 10% of the installed cost of qualified “solar energy devices” and applies to taxable years beginning January 1, 2006 and extending through December 31, 2018.
A solar energy device is defined as “a system or series of mechanisms designed primarily to provide heating, to provide cooling, to produce electrical power, to produce mechanical power, to provide solar daylighting or to provide any combination of the foregoing by means of collecting and transferring solar generated energy into such uses either by active or passive means, including wind generator systems that produce electricity. Solar energy systems may also have the capability of storing solar energy for future use. Passive systems shall clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal structure, such as a window.”
The maximum credit per taxpayer is $25,000 for any one building in the same year and $50,000 in total credits in any year. If the allowable credit exceeds the taxpayer’s income tax liability, the amount of the claim not used to offset taxes may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.
To qualify for the tax credits, a business must submit an application to the Arizona Department of Commerce (DOC). The DOC will review applications, provide an initial certification to qualifying installations, and issue a credit certificate to the business once the installation is complete and approved. The Arizona Department of Revenue will also receive a copy of the credit certificate. The DOC may certify tax credits up to a total of $1 million each calendar year. The DOC and the Department of Revenue will collaborate in adopting rules to implement the tax credit program.
