GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2013

S                                                                                                                                                    D

SENATE DRS85185-MH-43  (02/13)

Short Title:        Extend Renewable Energy Tax Credit Carryover.		(Public)
Sponsors:	Senator McKissick (Primary Sponsor).
Referred to:

A BILL TO BE ENTITLED

AN ACT to modify the Tax Credit for investing in renewable energy property to allow certain individual taxpayers a carryforward greater than five years.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 105-129.17(b) reads as rewritten:

"(b)      Cap. - The credits allowed in this Article may not exceed fifty percent (50%) of the tax against which they are claimed for the taxable year, reduced by the sum of all other credits allowed against that tax, except tax payments made by or on behalf of the taxpayer. This limitation applies to the cumulative amount of credit, including carryforwards, claimed by the taxpayer under this Article against each tax for the taxable year. Any Except as provided in G.S. 105-129.16A, any unused portion of the credits may be carried forward for the succeeding five years."

SECTION 2.  G.S. 105-129.16A reads as rewritten:

"§ 105-129.16A.  Credit for investing in renewable energy property.

(a)        Credit. - If a taxpayer that has constructed, purchased, or leased renewable energy property places it in service in this State during the taxable year, the taxpayer is allowed a credit equal to thirty-five percent (35%) of the cost of the property. In the case of renewable energy property that serves a nonbusiness purpose, the credit must be taken for the taxable year in which the property is placed in service. For all other renewable energy property, the entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service. Upon request of a taxpayer that leases renewable energy property, the lessor of the property must give the taxpayer a statement that describes the renewable energy property and states the cost of the property. No credit is allowed under this section to the extent the cost of the renewable energy property was provided by public funds. For the purposes of this section, "public funds" does not include grants made under section 1603 of the American Recovery and Reinvestment Tax Act of 2009.

(b)        Expiration. - If, in one of the years in which the installment of a credit accrues, the renewable energy property with respect to which the credit was claimed is disposed of, taken out of service, or moved out of State, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105-129.17.subsection (c1) of this section.

…

(c1) Carryforward. - Any unused portion of a credit allowed in this section may be carried forward for the succeeding five taxable years, unless an extended carryforward period of seven years applies. An extended carryforward period applies if the taxpayer meets all of the following:

(1) The taxpayer elects to take the credit against the individual income tax levied in Part 2 of Article 4 of this Chapter.

(2) The top tax rate imposed by G.S. 105-134.2 on the taxpayer's income during all years of the carryforward is no greater than seven percent (7%). If the taxpayer fails to meet this requirement at any point during the carryforward period, the taxpayer will forfeit the remaining amount of the credit.

…."

SECTION 3.  This act is effective for taxes imposed for taxable years beginning on or after July 1, 2013.