Renewable Energy Tax Credit News Briefs – November 2018

Thursday, November 8, 2018

Sens. Tim Scott, R-S.C., and Michael Bennet, D-Colo., wrote a letter Sept. 20 to U.S. Secretary of the Treasury Steven Mnuchin requesting clarification on whether energy storage technologies qualify for the renewable energy investment tax credit (ITC) when added to an existing ITC-eligible technology. The senators requested that the clarification be included in the Internal Revenue Service’s (IRS’s) 2018-2019 Priority Guidance Plan. The IRS previously recognized that energy storage technologies are eligible for the ITC when installed at the same time as ITC-eligible technologies, but has not explicitly affirmed whether storage technologies are eligible when added to an existing ITC-eligible technology. The letter is available at www.energytaxcredits.com.


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The Hawaii Department of Taxation issued Letter Ruling No. 2018-01 Sept. 12. The ruling clarifies when a commercial solar energy system has been installed and placed in service for the purposes of the Renewable Energy Technologies Income Tax Credit. The taxpayer contracted to build a solar energy system which was briefly turned on for testing in December 2017. The department explained that case law dictates that the use of an asset during construction does not satisfy the placed-in-service requirement, nor does merely testing the system during construction. The government’s approval and grant of an operation permit usually indicates that the system has been placed in service and is ready and available for full operation. The ruling stated that the solar system was placed in service in 2018, not 2017, and therefore the testing performed in December 2017 is outweighed by the installation of the fence and the approval of all required permits in 2018. 

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