Georgia Clean Energy Property Tax Credits Statute

GEORGIA STATUTE FOR CLEAN ENERGY PROPERTY TAX CREDITS

§ 48-7-29.14.  Income tax credit for clean energy property

(a) As used in this Code section, the term:
(1) “Authority” means the Georgia Environmental Facilities Authority.

(2) “Business property” means tangible personal property that is used by the taxpayer in connection with a business or for the production of income and is capitalized by the taxpayer for federal income tax purposes. The term does not include, however, a luxury passenger automobile taxable under Section 4001 of the Internal Revenue Code or a watercraft used principally for entertainment and pleasure outings for which no admission is charged.

(3) “Clean energy property” includes any of the following:
(A) 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, desalinization, or the production of industrial or commercial process heat, as well as related devices necessary for collecting, storing, exchanging, conditioning, or converting solar energy to other useful forms of energy;

(B) Energy Star certified geothermal heat pump systems;

(C) Energy efficient projects as follows:
(i) Lighting retrofit projects. “Lighting retrofit project” means a lighting retrofit system that employs dual switching (ability to switch roughly half the lights off and still have fairly uniform light distribution), delamping, daylighting, relamping, or other controls or processes which reduce annual energy and power consumption by 30 percent compared to the American Society of Heating, Refrigerating, and Air Conditioning Engineers 2004 standard (ASHRAE 90.1.2004); and

(ii) Energy efficient buildings. “Energy efficient building” means for other than single-family residential property new or retrofitted buildings that are designed, constructed, and certified to exceed the standards set forth in the American Society of Heating, Refrigerating, and Air Conditioning Engineers 2004 standard (ASHRAE 90.1.2004) by 30 percent;

(D) Wind equipment required to capture and convert wind energy into electricity or mechanical power as well as related devices that may be required for converting, conditioning, and storing the electricity produced by wind equipment; and

(E) Biomass equipment to convert wood residuals into electricity through gasification and pyrolysis.

(4) “Cost” means:
(A) In the case of clean energy property owned by the taxpayer, cost is the aggregate funds actually invested and expended by a taxpayer to put into service the clean energy property; and

(B) In the case of clean energy property the taxpayer leases from another, cost is eight times the net annual rental rate, which is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.

(5) “Installation” means the year in which the clean energy property is put into service and becomes eligible for a tax credit allowed by this Code section.

(6) “Renewable biomass qualified facility” means a renewable biomass qualified facility as defined by the Federal Energy Regulatory Commission which facility meets the open loop biomass standards promulgated pursuant to Section 45 of the Internal Revenue Code.

(7) “Wood residuals” means wood residuals that include land-clearing residue, urban wood residue, and pellets and do not include wood from any United States national forest.

(b) A tax credit under this Code section is subject to the following limits:

(1) A tax credit is allowed against the tax imposed under this article to a taxpayer for the construction, purchase, or lease of clean energy property that is placed into service in this state between July 1, 2008, and December 31, 2012; provided, however, this credit shall be further subject to the following conditions and limitations:

(A) A credit allowed by this Code section shall be taken for the taxable year in which the clean energy property is installed and may be taken against income tax or, if the taxpayer is an insurance company, against gross premium tax;

(B) A taxpayer that claims a credit allowed under this subsection shall not be eligible to claim any other credit under this subsection with respect to the same clean energy property;

(C) A taxpayer may not take the credit allowed in this subsection for clean energy property the taxpayer leases from another unless the taxpayer obtains the lessor’s written certification that the lessor will not claim a credit under this subsection with respect to the same clean energy property; and

(D) In no event shall the amount of the tax credits allowed by this Code section for a taxable year exceed the taxpayer’s liability for such taxes. Any unused credit amount shall be allowed to be carried forward for five years from the close of the taxable year in which the installment of the clean energy property occurred. No such credit shall be allowed the taxpayer against prior years’ tax liability.

To claim a credit allowed by this paragraph, the taxpayer shall provide any information required by the authority or department. Every taxpayer claiming a credit under this Code section shall maintain and make available for inspection by the authority or department any records that either entity considers necessary to determine and verify the amount of the credit to which the taxpayer is entitled. The burden of proving eligibility for a credit and the amount of the credit rests upon the taxpayer, and no credit may be allowed to a taxpayer that fails to maintain adequate records or to make them available for inspection;

(2) A taxpayer who transports or diverts wood residuals to a renewable biomass qualified facility shall be allowed a credit against the tax imposed by this article in an amount not to exceed the actual amount certified by the Georgia Forestry Commission to the taxpayer. The value of such credit shall be determined on a per tonnage basis. Such certification shall be based upon vouchers provided to the taxpayer by the renewable biomass qualified facility to whom the wood residuals are provided for the purpose of providing bioelectric power to a third party. The Georgia Forestry Commission shall calculate and attribute a dollar value to such wood residuals;

(3) In no event shall the total amount of tax credits allowed by this subsection exceed:

(A) For calendar year 2008, $2,500,000.00;

(B) For calendar year 2009, $2,500,000.00;

(C) For calendar year 2010, $2,500,000.00;

(D) For calendar year 2011, $2,500,000.00; and

(E) For calendar year 2012, $2,500,000.00.

(4) (A) A taxpayer seeking to claim any tax credit provided for under this Code section must submit an application to the commissioner for tentative approval of such tax credit. The commissioner shall promulgate the rules and forms on which the application is to be submitted. The commissioner shall review such application and shall tentatively approve such application upon determining that it meets the requirements of this Code section within 60 days after receiving such application.

(B) The commissioner shall allow the tax credits on a first come, first served basis. In no event shall the aggregate amount of tax credits approved by the commissioner for all taxpayers under this Code section in a calendar year exceed the limitations specified in paragraph (3) of this subsection;

(5) The credit allowed by this subsection shall not exceed the following amounts:

(A) For all types of clean energy property placed into service for any purpose other than single family residential, the credit allowed by this subsection may not exceed the lesser of 35 percent of the cost of the clean energy property described in subparagraphs (a)(3)(A) through (a)(3)(C) of this Code section or the following credit amounts for any clean energy property:

(i) A ceiling of $500,000.00 per installation applies to solar energy equipment for solar electric (photovoltaic), other solar thermal electric applications, and active space heating, wind equipment, and biomass equipment as described in subparagraphs (a)(3)(A), (a)(3)(D), and (a)(3)(E) of this Code section;

(ii) The sum of $100,000.00 per installation applies to clean energy property related to solar energy equipment for domestic water heating as described in subparagraph (a)(3)(A) of this Code section which is certified for performance by the Solar Rating Certification Corporation, Florida Solar Energy Center, or by a comparable entity approved by the authority to have met the certification of Solar Rating Certification Corporation OG-100 or Florida Solar Energy Center-GO-80 for solar thermal collectors;

(iii) For Energy Star certified geothermal heat pump systems as described in subparagraph (a)(3)(B) of this Code section, the sum of $100,000.00;

(iv) For a lighting retrofit project as described in division (a)(3)(C)(i) of this Code section, the sum of $0.60 per square foot of the building with a maximum of $100,000.00; and

(v) For an energy efficient building as described in division (a)(3)(C)(ii) of this Code section, the sum of the cost of energy efficient products installed during construction at $1.80 per square foot of the building, with a maximum of $100,000.00; and

(B) The following ceilings apply to clean energy property placed in service for single family residential purposes, the lesser of 35 percent of the cost or:

(i) The sum of $2,500.00 per dwelling unit applies for clean energy property related to solar energy equipment for domestic water heating as described in subparagraph (a)(3)(A) of this Code section which is certified for performance by the Solar Rating Certification Corporation, Florida Solar Energy Center, or by a comparable entity approved by the authority to have met the certification of Solar Rating Certification Corporation OG-100 or Florida Solar Energy Center-GO-80 for solar thermal collectors, Solar Rating Certification Corporation certification OG-300 or Florida Solar Energy Center-GP-5-80 for solar thermal residential systems, or both;

(ii) The sum of $10,500.00 per dwelling unit applies for clean energy property related to solar energy equipment for solar electric (photovoltaic), other solar thermal electric applications, and active space heating as described in subparagraph (a)(3)(A) of this Code section, or to wind as described in subparagraph (a)(3)(B) of this Code section; and

(iii) The sum of $2,000.00 per installation for Energy Star certified geothermal heat pump systems applies as described in subparagraph (a)(3)(B) of this Code section; and

(6) (A) Where the amount of any credits allowed by this Code section except for the credit under paragraph (2) of subsection (b) of this Code section exceeds the taxpayer’s liability for such taxes in a taxable year, the excess may be taken as a credit against such taxpayer’s quarterly or monthly payment under Code Section 48-7-103. Each employee whose employer receives credit against such taxpayer’s quarterly or monthly payment under Code Section 48-7-103 shall receive credit against his or her income tax liability under Code Section 48-7-20 for the corresponding taxable year for the full amount which would be credited against such liability prior to the application of the credit provided for in this subsection. Credits against quarterly or monthly payments under Code Section 48-7-103 and credits against liability under Code Section 48-7-20 established by this subsection shall not constitute income to the taxpayer.

(B) In no event shall the total amount of the tax credit under paragraph (2) of subsection (b) of this Code section for a taxable year exceed the taxpayer’s income tax liability. Any unused tax credit shall be allowed the taxpayer against succeeding years’ tax liability. No such credit shall be allowed the taxpayer against prior years’ tax liability.

(c) The authority and department shall be authorized to adopt rules and regulations to provide for the administration of any tax credit provided by this Code section. Specifically, the authority and department shall create a mechanism to track and report the status and availability of credits for the public to review at a minimum on a quarterly basis.

(d) The authority and the department shall provide an annual report of:

(1) The number of taxpayers that claimed the credits allowed in this Code section;

(2) The cost of business property and clean energy property with respect to which credits were claimed;

(3) The type of clean energy property installed and the location;

(4) A determination of associated energy and economic benefits to the state; and

(5) The total amount of credits allowed.

GEORGIA REGULATIONS COVERING CLEAN ENERGY PROPERTY TAX CREDITS

560-7-8-.48 Clean Energy Property and Wood Residuals Tax Credits.
(1) Purpose. This regulation provides guidance concerning the implementation and
administration of the tax credits under O.C.G.A. § 48-7-29.14.
(2) Coordination of Agencies. The Georgia Environmental Facilities Authority and
the Department of Revenue have been designated as the primary agencies responsible
within Georgia to administer the program. Additionally, the Georgia Forestry
Commission is the state agency responsible for certifying the dollar amount of wood
residuals transported or diverted to a renewable biomass qualified facility. The Office of
Insurance and Safety Fire Commissioner is the state agency that administers the gross
premium tax.
(3) Tax Credits for the Construction, Purchase, or Lease of Clean Energy
Property. The tax credit under O.C.G.A. § 48-7-29.14(b)(1) is a tax credit against
Georgia income tax, or if the taxpayer is an insurance company, against Georgia
premium tax. It shall be granted to a taxpayer for the construction, purchase, or lease of
clean energy property that is placed into service in this state between July 1, 2008 and
December 31, 2012.
(a) Confirmation. Prior to submitting an application for approval to claim the clean
energy property tax credit (Form IT-CEP-AP), the taxpayer must complete a preapplication
through the Georgia Environmental Facilities Authority. After completing
this form, the taxpayer will receive a confirmation. Such confirmation must be attached
to Form IT-CEP-AP.
(b) Credit limitations. The amount of the clean energy property tax credit granted to a
taxpayer shall not exceed:
1. For all types of clean energy property placed into service for any purpose other than
single family residential, the credit allowed may not exceed the lesser of 35 percent of the
cost of the clean energy property described in O.C.G.A. § 48-7-29.14(a)(3)(A) through
O.C.G.A. § 48-7-29.14(a)(3)(C), or the following credit amounts for any clean energy
property:
(i) For solar energy equipment for solar electric (photovoltaic), other solar thermal
electric applications, and active space heating as described in O.C.G.A. § 48-7-
29.14(a)(3)(A) the credit amount shall not exceed $500,000.00 per installation;
(ii) For clean energy property related to solar energy equipment for domestic water
heating as described in O.C.G.A. § 48-7-29.14(a)(3)(A), which is certified for
performance by the Solar Rating Certification Corporation, Florida Solar Energy Center,
or by a comparable entity approved by the Georgia Environmental Facilities Authority to
have met the certification of Solar Rating Certification Corporation OG-100 or Florida
Solar Energy Center-GO-80 for solar thermal collectors, the credit amount shall not
exceed $100,000.00 per installation;
(iii) For Energy Star certified geothermal heat pump systems as described in O.C.G.A.
§ 48-7-29.14(a)(3)(B), the credit amount shall not exceed $100,000.00;
(iv) For a lighting retrofit project as described in O.C.G.A. § 48-7-29.14(a)(3)(C)(i), the
credit amount shall not exceed $0.60 per square foot of the building with a maximum
credit amount of $100,000; and
(v) For an energy efficient building as described in O.C.G.A. § 48-7-29.14(a)(3)(C)(ii),
the credit amount for all energy efficient products installed during construction shall not
exceed $1.80 per square foot of the building, with a maximum credit amount of
$100,000.00.
(I) Example of credit limit in subparagraph 3(b)1.(iv) of this regulation. Taxpayer
installs a lighting retrofit project described in O.C.G.A. § 48-7-29.14(a)(3)(C)(i) into a
1,500 square foot building. The lighting retrofit project costs $1,000. Since 35% of the
cost of the lighting retrofit project (equals $350) is less than $.60 per square foot of the
building (equals $900), the taxpayer would request a credit amount of $350 on Form ITCEP-
AP for preapproval.
(II) Example of the credit limit in subparagraph 3(b)1.(v) of this regulation. Taxpayer
installs energy efficient products in an energy efficient building, which is 15,000 square
feet, as described in O.C.G.A. § 48-7-29.14(a)(3)(C)(ii). The cost of all energy efficient
products installed in the building is $12,000. Since 35% of the cost of all energy efficient
products (equals $4,200) is less than $1.80 per square foot of the building (equals
$27,000), the taxpayer would request a credit amount of $4,200 on Form IT-CEP-AP for
preapproval.
2. For wind equipment as described in O.C.G.A. § 48-7-29.14(a)(3)(D) the credit
amount shall not exceed $500,000.00 per installation.
(i) For biomass equipment as described in O.C.G.A. § 48-7-29.14(a)(3)(E) the credit
amount shall not exceed $500,000.00 per installation.
3. The following credit limits apply to clean energy property placed in service for single
family residential purposes, the lesser of 35 percent of the cost or:
(i) For clean energy property related to solar energy equipment for domestic water
heating as described in O.C.G.A. § 48-7-29.14(a)(3)(A), which is certified for
performance by the Solar Rating Certification Corporation, Florida Solar Energy Center,
or by a comparable entity approved by the Georgia Environmental Facilities Authority to
have met the certification of Solar Rating Certification Corporation OG-100 or Florida
Solar Energy Center-GO-80 for solar thermal collectors, Solar Rating Certification
Corporation certification OG-300 or Florida Solar Energy Center-GP-5-80 for solar
thermal residential systems, or both, the credit amount shall not exceed $2,500.00 per
dwelling unit;
(ii) For clean energy property related to solar energy equipment for solar electric
(photovoltaic), other solar thermal electric applications, and active space heating as
described in O.C.G.A. §  48-7-29.14(a)(3)(A), the credit amount shall not exceed
$10,500.00 per dwelling unit; and
(iii) For Energy Star certified geothermal heat pump systems described in O.C.G.A. §
48-7-29.14(a)(3)(B), the credit amount shall not exceed $2,000.00 per installation.
(c) Carry forward. Any unused credit in a taxable year may be carried forward for five
years from the close of the taxable year in which the installment of the clean energy
property occurred.
(4) Tax Credit for Transporting or Diverting Wood Residuals. The tax credit under
O.C.G.A. § 48-7-29.14(b)(2) is a tax credit against Georgia income tax and shall be
granted to a taxpayer who transports or diverts wood residuals to a renewable biomass
qualified facility on or after July 1, 2008. The taxpayer eligible to claim this credit shall
be the taxpayer that received certification from the Georgia Forestry Commission for
transporting or diverting wood residuals.
(a) Certification. Prior to submitting an application for approval (Form IT-WR-AP) to
claim the tax credit for transporting or diverting wood residuals, the taxpayer must
receive certification, which attributes a dollar value to such transported or diverted wood
residuals, from the Georgia Forestry Commission. Such certification must be attached to
Form IT-WR-AP.
(b) Credit limitation. The amount of wood residual tax credit granted to a taxpayer
shall not exceed the actual amount certified by the Georgia Forestry Commission to the
taxpayer.
(c) Carry forward. Any unused credit for transporting or diverting wood residuals shall
be allowed against succeeding years’ tax liability.
(5) Credit Cap. In no event shall the total amount of tax credits allowed under both
O.C.G.A. § 48-7-29.14(b)(1) and (b)(2) exceed the following amounts:
(a) For calendar year 2008, $2,500,000;
(b) For calendar year 2009, $2,500,000;
(c) For calendar year 2010, $2,500,000;
(d) For calendar year 2011, $2,500,000; and
(e) For calendar year 2012, $2,500,000.
(6) Denial of Credit. In the event it is determined that the taxpayer has not met all the
requirements of O.C.G.A. §  48-7-29.14 and this regulation, then the amount of the credits
shall not be tentatively approved or the tentatively approved credits shall be retroactively
denied. With respect to such denied credits, tax, interest, and penalties shall be due if the
credits have already been claimed.
(7) Claiming tax credits under O.C.G.A. § 48-7-29.14(b)(1) and (b)(2). Any
taxpayer seeking to claim tax credits under O.C.G.A. § 48-7-29.14(b)(1) or (b)(2) , must
submit the appropriate forms to the Department of Revenue as provided in this paragraph.
(a) Application. A taxpayer seeking to claim tax credits under O.C.G.A. § 48-7-
29.14(b)(1), whether utilizing the credit against income tax or premium tax, must submit
Form IT-CEP-AP and a confirmation from the Georgia Environmental Facilities
Authority to the Commissioner for tentative approval.
1. A taxpayer seeking to claim tax credits under O.C.G.A. § 48-7-29.14(b)(2), must
submit Form IT-WR-AP, and a certification from the Georgia Forestry Commission, to
the Commissioner for tentative approval.
(b) Notification. The Department will notify each taxpayer of the tax credits, tentatively
approved and allocated to such taxpayer, within sixty (60) days from the date the
application was received.
(c) Allocation of tax credits. The Commissioner shall allow tax credits under O.C.G.A.
§ 48-7-29.14(b)(1) and (b)(2) on a first-come, first-served basis. The post mark date of
Form IT-CEP-AP and Form IT-WR-AP shall be used to determine such first-come, firstserved
basis.
(d) Applications received on the day the maximum credit amount is reached. In the
event that the credit amounts on applications received by the Commissioner exceed the
maximum aggregate limits in paragraph (5) of this regulation, then the tax credits shall be
allocated among the taxpayers whose applications were received by the Commissioner on
the day the maximum aggregate limit was exceeded on a pro rata basis based upon
amounts otherwise allowed under O.C.G.A. § 48-7-29.14 and this regulation. Only credit
amounts on applications received on the day the maximum aggregate limits were
exceeded will be allocated on a pro rata basis.
(e) Income or Premium tax. A taxpayer claiming income or premium tax credits under
O.C.G.A. § 48-7-29.14(b)(1) must attach an approved Form IT-CEP-AP and Form ITCEP
to its Georgia income or premium tax return for each tax year in which income or
premium tax credits are claimed.
1. A taxpayer claiming income tax credits under O.C.G.A. § 48-7-29.14(b)(2) must
attach an approved Form IT-WR-AP and Form IT-WR to its Georgia income tax return
each year in which income tax credits are claimed.
(f) Withholding tax. A taxpayer may claim any excess tax credit from O.C.G.A. § 48-7-
29.14(b)(1), the clean energy property tax credit, against its withholding tax liability. The
withholding tax benefit may only be applied against the withholding tax account used by
the taxpayer for payroll purposes.
1. Notice of Intent. To claim any excess tax credit not used on the income tax return
against the taxpayer’s withholding tax liability, the taxpayer must file Revenue Form ITWH
at least thirty (30) days prior to the due date of the Georgia income tax return
(including extensions) or at least thirty (30) days prior to the filing of the income tax
return, whichever occurs first. Failure to file this form as indicated will result in
disallowance of the withholding tax benefit. However, in the case of a credit which is
earned in more than one taxable year, the election to claim the withholding credit will be
available for the credit earned in such subsequent year.
(i) If the taxpayer is an insurance company, to claim any excess tax credit not used on
the premium tax return against the taxpayer’s withholding tax liability, the taxpayer must
file Revenue Form IT-WH-CEP with both the Department of Revenue and the Office of
Insurance and Safety Fire Commissioner at least thirty (30) days prior to the due date of
the Georgia premium tax return (including extensions) or at least thirty (30) days prior to
the filing of the premium tax return, whichever occurs first. Failure to file this form as
indicated will result in disallowance of the withholding tax benefit. However, in the case
of a credit which is earned in more than one taxable year, the election to claim the
withholding credit will be available for the credit earned in such subsequent year.
2. Review Period. The Department of Revenue has ninety (90) days from the date the
income tax return claiming the tax credit is received to review the credit and make a
determination of the amount eligible to be used against withholding tax.
(i) The Department of Revenue has ninety (90) days from the date the premium tax
return claiming the tax credit is received by the Office of Insurance and Safety Fire
Commissioner to review the credit and make a determination of the amount eligible to be
used against withholding tax.
3. Letter of Eligibility. Once the review is completed, a letter will be sent to the
taxpayer stating the tax credit amount which may be applied against withholding and
when the taxpayer may begin to claim the tax credit against withholding tax. The
Department of Revenue shall treat this amount as a credit against future withholding tax
payments and will not refund any previous withholding payments.
(8) Pass-Through Entities. When the taxpayer is a pass-through entity, and has no
income tax liability of its own, the tax credits will pass to its members, shareholders, or
partners based on the year ending profit/loss percentage. The credit forms will initially be
filed with the tax return of the taxpayer to establish the amount of the credit available for
pass through. The credit will then pass through to its shareholders, members, or partners
to be applied against the tax liability on their income tax returns. The shareholders,
members, or partners may not claim any excess clean energy property tax credit against
their withholding tax liabilities. The credits are available for use as a credit by the
shareholders, members, or partners for their tax year in which the income tax year of the
pass-through entity ends. For example: A partnership earns the credit for its tax year
ending January 31, 2009. The partnership passes the credit to a calendar year partner.
The credit is available for use by the partner beginning with the calendar 2009 tax year.
(9) Annual Reports. The Georgia Environmental Facilities Authority shall provide an
annual report of a determination of associated energy and economic benefits to the state.
(a) The Department of Revenue shall provide an annual report consisting of:
1. The number of taxpayers that claimed the credits allowed under O.C.G.A. § 48-7-
29.14;
2. The cost of business property and clean energy property with respect to which credits
were claimed;
3. The location and type of clean energy property installed; and
4. The total amount of credits allowed.
(10) Tracking and Reporting the Status and Availability of Credits. By the end of
the month following the end of each calendar year quarter, the Department of Revenue
shall post on its website the amount of credits preapproved through the end of such
quarter, the amount preapproved year to date, and the amount of credits that are available
to be claimed.
(11) Effective Date. The effective date for this regulation is July 1, 2008.
Authority O.C.G.A. Secs. 48-2-12, 48-7-29.14. History. Original Rule entitled “Clean Energy Property and
Wood Residuals Tax Credits” adopted as ER. 560-7-8-0.34-.48. F. and eff. June 27, 2008. Amended:
Permanent Rule of same title adopted. F. Aug. 19, 2008; eff. Sept. 8, 2008, the date of adoption