Relating to the solar energy system tax credit available against the individual and corporate income tax, the franchise tax, the moneys and credits tax, and including effective date and retroactive applicability provisions

The bill creates a residential solar energy system tax credit equal to percent of the gross cost of the system, up to $5,000. The bill creates a separate commercial solar energy system tax credit not to exceed percent of the gross cost of the system, up to $20,000. The tax credit is available against the individual and corporate income taxes, the franchise tax, and the moneys and credits tax. The bill defines “residential solar energy system” to mean a solar energy project on residential property or multiresidential property. The bill defines “commercial solar energy system” to mean a solar energy system on a nonresidential property. Any tax credit approved under the bill is not refundable but the excess for the tax year may be credited to the tax liability for the following years or until depleted, whichever is earlier. A taxpayer eligible to claim a credit under the bill is not eligible to claim a renewable energy tax credit under Code chapter 476C. The bill provides that a taxpayer may claim more than one tax credit, but may claim only one credit per separate and distinct solar energy system installation. For the 2021 calendar year, the bill increases the maximum cumulative value of tax credits that may be claimed during the calendar year from $4 million to $17 million. Of this increased maximum tax credit amount for the 2021 calendar year, $7 million is reserved for claims placed on the wait list prior to January 1, 2021. The reserved claims shall be approved using the same priority of approval established for the wait list. An applicant placed on the wait list prior to January 2021 shall be given priority to make a claim for amounts not reserved for the year 2021, to the extent such claims have not been claimed. In the event the maximum cumulative amount of tax credits have been claimed for the year 2021 under the bill, the applicant shall have priority on any wait list based upon the date the application for the credit was received by the department of revenue. Beginning in the 2022 calendar year through the 2030 calendar year, the bill establishes the maximum cumulative value of tax credits that may be claimed during the year at $10 million. The bill repeals the solar energy tax credit on January 1, 2041, which is years after the tax year the credit may be claimed for completed installations in order to allow any credit in excess of tax liability for installations completed prior to December 31, 2030, to be credited to future tax liability for up to years. Division I takes effect upon enactment and applies retroactively to January 1, 2021, for tax years ending on or after that date. DIVISION II —— CORRESPONDING CHANGES DUE TO REPEAL OF THE SOLAR ENERGY SYSTEM TAX CREDIT. The bill makes corresponding changes in the Code due to the repeal of the solar energy system tax credit on January 1, 2041.