Bill Text: NJ S1548 | 2010-2011 | Regular Session | Introduced
Bill Title: Provides partial tax credit under corporation business tax and gross income tax for cost of renewable energy property.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-03-04 - Introduced in the Senate, Referred to Senate Environment and Energy Committee [S1548 Detail]
Download: New_Jersey-2010-S1548-Introduced.html
Sponsored by:
Senator BILL BARONI
District 14 (Mercer and Middlesex)
SYNOPSIS
Provides partial tax credit under corporation business tax and gross income tax for cost of renewable energy property.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a credit under the corporation business tax and the gross income tax for purchase and installation of renewable energy property, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 35 percent of the purchase price and installation costs for renewable energy property that has been constructed, purchased or leased and put into use in this State in the privilege period for a residential or commercial structure. In the case of renewable energy property that serves a single‑family dwelling, the credit shall be allowed for the privilege period in which the property is placed in service. For all other renewable energy property, the credit shall be allowed in five equal installments beginning with the privilege period in which the renewable energy property is placed in service.
b. If, in any privilege period in which the installment of a credit accrues, the renewable energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of State, the credit shall expire and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take any portion of an installment that accrued in a previous privilege period and was carried forward to the extent permitted under subsection c. of this section. No credit shall be allowed under this section to the extent the cost of the renewable energy property was paid from public funds.
The credit allowed by this section may not exceed the following amounts:
(1) For nonresidential property, $2,500,000 per installation of renewable energy property.
(2) For residential property:
(a) $1,400 per dwelling unit for solar energy equipment for domestic water heating, including pool heating.
(b) $3,500 per dwelling unit for solar energy equipment for active space heating, combined active space and domestic hot water systems, and passive space heating.
(c) $10,500 per installation for any other renewable energy property for residential purposes.
A taxpayer claiming any other credit allowed under P.L.1945, c.162 with respect to renewable energy property may not take the credit allowed in this section with respect to the same property. A taxpayer may not take the credit allowed in this section for renewable energy property that the taxpayer leases from another unless the taxpayer obtains the lessor's written certification that the lessor will not claim a credit under any other law of this State with respect to the property.
The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 for a privilege period, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162.
c. An unused credit may be carried forward, if necessary, for use in the seven privilege periods following the privilege period for which the credit is allowed.
d. In consultation with the Commissioner of Environmental Protection and the Board of Public Utilities, the Director shall develop, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), technical criteria for determining eligibility under this section for renewable energy property.
e. As used in this section:
"Daylighting" means the practice of placing windows, or other transparent media, or reflective surfaces so that, during the day, natural light provides effective internal illumination.
"Hydroelectric generator" means a machine that produces electricity by water power or by the friction of water or steam.
"Renewable biomass resource" means organic matter produced by terrestrial and aquatic plants and animals, such as standing vegetation, aquatic crops, forestry and agricultural residues, spent pulping liquor, landfill wastes, and animal wastes.
"Renewable energy property" means any of the following machinery, equipment, or real property: (1) biomass equipment that uses a renewable biomass resource for biofuel production of ethanol, methanol, and biodiesel; anaerobic biogas production of methane utilizing agricultural and animal waste or garbage; or commercial thermal or electrical generation, and includes related devices for converting, conditioning, and storing the liquid fuels, gas, and electricity produced with biomass equipment; (2) a hydroelectric generator, located at a dam or in a free‑flowing waterway, and a related device for water supply and control, and converting, conditioning, and storing the electricity generated; (3) solar energy equipment that uses solar radiation as a substitute for traditional energy for water heating, active space heating and cooling, passive heating, daylighting, generating electricity, distillation, desalination, detoxification, or the production of industrial or commercial process heat, and includes related devices necessary for collecting, storing, exchanging, conditioning, or converting solar energy to other useful forms of energy; or (4) wind equipment required to capture and convert wind energy into electricity or mechanical power, and related devices for converting, conditioning, and storing the electricity produced.
"Renewable fuel" means (1) biodiesel or any fuel or mixture of fuels derived in whole or in part from agricultural products or animal fats or wastes from these products or fats, or (2) ethanol that is either unmixed or in mixtures with gasoline that are seventy percent or more ethanol by volume.
2. a. A taxpayer shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 35 percent of the purchase price and installation costs for renewable energy property that has been constructed, purchased or leased and put into use in this State in the taxable year for a residential or commercial structure. In the case of renewable energy property that serves a single‑family dwelling, the credit shall be allowed for the taxable year in which the property is placed in service. For all other renewable energy property, the credit shall be allowed in five equal installments beginning with the taxable year in which the renewable energy property is placed in service.
b. If, in any taxable year in which the installment of a credit accrues, the renewable energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of State, the credit shall expire and the taxpayer may not take any remaining installment of the credit. No credit shall be allowed under this section to the extent the cost of the renewable energy property was paid from public funds.
The credit allowed by this section may not exceed the following amounts:
(1) For nonresidential property, $2,500,000 per installation of renewable energy property placed in service for any purpose other than residential.
(2) For residential property:
(a) $1,400 per dwelling unit for solar energy equipment for domestic water heating, including pool heating.
(b) $3,500 per dwelling unit for solar energy equipment for active space heating, combined active space and domestic hot water systems, and passive space heating.
(c) $10,500 per installation for any other renewable energy property for residential purposes.
A taxpayer claiming any other credit allowed under this chapter with respect to renewable energy property may not take the credit allowed in this section with respect to the same property. A taxpayer may not take the credit allowed in this section for renewable energy property that the taxpayer leases from another unless the taxpayer obtains the lessor's written certification that the lessor will not claim a credit under this chapter with respect to the property.
If the credit allowed pursuant to subsection a. of this section reduces the tax liability otherwise due to zero, any amount of credit remaining shall be paid to the taxpayer as a refund of an overpayment of tax pursuant to N.J.S.54A:9-7, provided however, that subsection (f) of that section, concerning the allowance of interest, shall not apply. The director shall determine the form and manner by which a taxpayer shall apply for and receive a refund of an overpayment pursuant to this section.
c. In consultation with the Commissioner of Environmental Protection and the Board of Public Utilities, the Director shall develop, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), technical criteria for determining eligibility under this section for renewable energy property.
d. As used in this section:
"Daylighting" means the practice of placing windows, or other transparent media, or reflective surfaces so that, during the day, natural light provides effective internal illumination.
"Hydroelectric generator" means a machine that produces electricity by water power or by the friction of water or steam.
"Renewable biomass resource" means organic matter produced by terrestrial and aquatic plants and animals, such as standing vegetation, aquatic crops, forestry and agricultural residues, spent pulping liquor, landfill wastes, and animal wastes.
"Renewable energy property" means any of the following machinery, equipment, or real property: (1) biomass equipment that uses a renewable biomass resource for biofuel production of ethanol, methanol, and biodiesel; anaerobic biogas production of methane utilizing agricultural and animal waste or garbage; or commercial thermal or electrical generation, and includes related devices for converting, conditioning, and storing the liquid fuels, gas, and electricity produced with biomass equipment; (2) a hydroelectric generator, located at a dam or in a free‑flowing waterway, and a related device for water supply and control, and converting, conditioning, and storing the electricity generated; (3) solar energy equipment that uses solar radiation as a substitute for traditional energy for water heating, active space heating and cooling, passive heating, daylighting, generating electricity, distillation, desalination, detoxification, or the production of industrial or commercial process heat, and includes related devices necessary for collecting, storing, exchanging, conditioning, or converting solar energy to other useful forms of energy; or (4) wind equipment required to capture and convert wind energy into electricity or mechanical power, and related devices for converting, conditioning, and storing the electricity produced.
"Renewable fuel" means (1) biodiesel or any fuel or mixture of fuels derived in whole or in part from agricultural products or animal fats or wastes from these products or fats, or (2) ethanol that is either unmixed or in mixtures with gasoline that are seventy percent or more ethanol by volume.
3. This act shall take effect immediately and expire on January 1, 2016. Section 1 shall apply to privilege periods beginning after the date of enactment. Section 2 shall apply to taxable years beginning after the date of enactment.
STATEMENT
This bill gives corporation business taxpayers and gross income taxpayers a partial credit for expenses incurred in purchasing or installing "renewable energy property" as that term is defined in the bill. The purpose of this bill is to encourage taxpayers to install renewable energy property to increase the energy efficiency and environmental friendliness of New Jersey's homes and businesses.
Under this bill, corporation business taxpayers can take a credit for 35 percent of the cost (up to certain dollar amount maximums provided in the bill) of purchasing, installing, and putting into use renewable energy property, depending on the use of such property. However, the credit together with all other credits may not exceed 50 percent of the taxpayer's liability. If the 50 percent limit precludes a taxpayer from using the full amount of its renewable energy property credit, the taxpayer may apply the leftover credit in the next seven privilege periods. In the case of renewable energy property that serves a single‑family dwelling, the credit must be taken for the taxable year in which the property is placed in service. For all other renewable energy property, the entire credit may not be taken for the taxable year in which the renewable energy property is placed in service but must be taken in five equal installments beginning with the taxable year in which the renewable energy property is placed in service.
If, in one of the years in which the installment of a credit accrues, the renewable energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of State, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under the bill. No credit shall be allowed under the bill to the extent the cost of the renewable energy property was paid from public funds.
The bill also provides a similar credit for gross income taxpayers. Thirty-five percent of the cost of purchasing and installing renewable energy property can be taken as a gross income tax credit (up to certain dollar amount maximums provided in the bill) of purchasing, installing, and putting into use renewable energy property, depending on the use of such property. If the credit reduces the taxpayer's liability below zero, the amount by which the credit exceeds the liability shall be refunded to the gross income taxpayer.
The bill provides that expenses which give rise to a credit under this bill may not be used in a duplicative manner to secure a credit under both the gross income tax and the corporation business tax. The bill also limits the number of times renewable energy property may generate a credit to one.
