HF 641 — A bill for an act 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.

Bill Text

• Introduced View text Current pdf

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill changes the solar energy system tax credit structure in Iowa, transitioning from a percentage of federal credits to a flat percentage of installation costs, while increasing the cumulative annual cap on credits.

• Section 422.11L

  the solar energy system tax credit equals the sum of 50 percent of the federal residential energy efficient property credit, not to exceed $5,000, plus 50 percent of the federal energy credit related to solar energy systems, not to exceed $20,000. → the taxes imposed under this subchapter, less the credits allowed under section 422.12, shall be reduced by a solar energy system tax credit equal to fifteen percent of the gross cost of the solar energy system, not to exceed five thousand dollars.

  This change establishes a new calculation method for the solar energy system tax credit based on installation costs instead of federal credits.

• Section 422.11L

  the maximum cumulative value of tax credits that may be claimed during the year from $4 million → to $10 million.

  This increases the total amount of available tax credits for solar energy systems claimed each year.

• Section 422.12

  A taxpayer who is eligible to claim a credit under this section shall not be eligible to claim a renewable energy tax credit under chapter 476C.

  Taxpayers can no longer claim both the solar energy system tax credit and a renewable energy tax credit.

• Section 422.11L

  A taxpayer may claim more than one credit under this section, but may claim only one credit per separate and distinct solar energy system installation.

  This clarifies that multiple tax credits can be claimed, but limits the number to one credit per unique installation.

• Section 422.11L

  The cumulative value of tax credits claimed annually by applicants pursuant to this section shall not exceed ten million dollars.

  It sets a limit on the total value of tax credits that can be claimed in a year.

• Section 422.11L

  If an amount of tax credits available for a tax year pursuant to paragraph “a” goes unclaimed, the amount of the unclaimed tax credits shall be made available for the following tax year.

  This allows any unused credits from one year to carry over to the next year.

• Section 422.11L

  An application must be approved by the department in order to claim the tax credit.

  This establishes a requirement for departmental approval of applications for the tax credit.

• Section 422.11L

  The department shall establish criteria, by rule, for determining what constitutes a separate and distinct installation.

  This grants authority to the department to define what counts as a separate installation for tax credits.

• Section 422.11L

  The department shall accept and approve applications on a first-come, first-served basis until the maximum amount of tax credits that may be claimed.

  It introduces a first-come, first-served process for approving tax credit applications.

• Section 422.11L

  Placement on a wait list pursuant to this subparagraph shall not constitute a promise binding the state.

  This clarifies that being placed on a waitlist does not guarantee future tax credits.

Action History

1. February 23, 2021

   Introduced, referred to Ways and Means.

Sponsors

• Bohannan · Primary

Subjects