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IOWA: Multiple Taxes: Renewable Energy Tax Credit Created

Posted on: Sunday, 17 July 2005, 03:00 CDT

A producer or purchaser of renewable energy may receive a renewable energy tax credit for Iowa personal income, corporate income, and insurance companies tax purposes. The credit is not available for tax years starting before July 1, 2006.

The credit amount is calculated at (a) 1.5tf per kilowatt hour of electricity, (b) $4.50 per million British thermal units of heat for a commercial purpose, (c) $4.50 per million British thermal units of methane gas used to generate electricity, or (d) $1.44 per thousand standard cubic feet of hydrogen fuel

. The credit is disallowed if a related person buys the energy and the credit may be carried forward for seven years. An "eligible renewable energy facility" is located in Iowa, 51% owned by a resident, and is initially placed in service between July 1, 2005, and January 1, 2011. While the maximum amount of nameplate generating capacity of all wind energy conversion facilities cannot exceed 90 megawatts, the maximum amount of energy production capacity equivalent of all other facilities cannot exceed a combined output of 10 megawatts. (S.F. 390, Laws 2005, effective June 15, 2005, and as noted above.) Copyright CCH Incorporated: Federal and State Tax Jul 6, 2005

Source: State Tax Review

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