Tax Credits & Incentives

The 2009 Recovery Act offers a variety of tax credits and incentives for Oklahoma businesses. This section provides a brief description of those tax credits and incentives. 

Please check back from time to time to see what's new since this is not yet a complete list. Other good sources for financial assistance and contract opportunities include: www.ok.gov/recovery; www.recovery.gov; www.grants.gov; and www.fedbizopps.gov. 

Renewable Energy Equipment Manufacturing Tax Credit
Treasury, DOE Now Accepting Applications; Guidelines Avaliable
The U.S. Department of the Treasury and the U.S. Department of Energy (DOE) recently released guidelines and applications for a Recovery Act program designed to award $2.3 billion in tax credits to manufacturers of advanced energy equipment. 

The Recovery Act created a new tax credit program by authorizing Treasury to provide developers with an investment tax credit of 30% for facilities that manufacture particular types of energy equipment.

Qualifying projects will include those that manufacture solar, wind, and geothermal energy equipment as well as fuel cells, microturbines, batteries and grid technology to support the transmission of renewable energy.

The manufacturing tax credit is capped at $2.3 billion, and credits are available for two years or until the cap is reached. Companies can file applications for the first round of credit awards through October 16, 2009, and can expect to learn whether their applications are successful by January 15, 2010.

Click here for more information on how to apply for the tax credits.

Contact:
The Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
202-622-2000
www.ustreas.gov/recovery

Production Tax Credit (PTC)
The 2009 Recovery Act extends the Production Tax Credit (PTC) for qualifying wind generation facilities through Dec. 31, 2012. It also extends the placed-in-service deadline to Dec. 31, 2013 for qualifying geothermal, biomass, hydropower, landfill gas, waste-to-energy, marine and hydrokinetic facilities. The PTC removes the $4,000 cap for small wind projects, and provides a tax credit over a period of 10 years based on electricity generated during that time.

Investment Tax Credit (ITC)
U.S. Department of Treasury Now Accepting ITC Grant Applications
The U.S. Department of the Treasury and the U.S. Department of Energy are (as of Friday, July 31) accepting applications for the estimated $3 billion available for the development of renewable energy projects around the country.

Funded through the 2009 Recovery Act, the program provides direct payments in lieu of tax credits to support an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.

Subsidized Energy Financing Limitation on ITC Repealed
The 2009 Recovery Act repeals the subsidized energy financing limitation on the ITC to allow businesses and individuals to qualify for the full amount of the ITC even if their property is financed with industrial development bonds or through any other subsidized energy financing. Previously, the ITC had to be reduced if the property qualifying for the ITC was also financed with industrial development bonds or through any other federal, state or local subsidized financing program.

ITC Dollar Caps Repealed for Small Wind Projects
The 2009 Recovery Act also repeals the individual dollar caps written into the small wind ITC provision in the Emergency Economic Stabilization Act of 2008. Businesses are now allowed to claim a full 30% ITC for qualified small wind energy property.

Bonus Depreciation Extended
The 2009 Recovery Act extends bonus depreciation for capital expenditures incurred in 2009. This allows businesses to recover the costs of capital expenditures made in 2009 faster than the ordinary depreciation schedule by permitting them to immediately write off 50% of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2009 for use in the United States.

New Clean Renewable Energy Bonds (CREBs) & Quarterly Tax Credit
The 2009 Recovery Act increases the national bond volume limitation for new CREBs to $2.4 billion, up from $800 million. CREBs can finance facilities that generate electricity from the following resources: wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, marine renewable- and trash-combustion facilities. The facilities are owned by public power providers, governmental bodies, and electricity cooperatives.

Instead of receiving interest payments, the CREBs holder receives a quarterly tax credit. The rules for how these funds are allocated remains the same: 1/3 for qualifying projects of state/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives.

Qualified Energy Conservation Bonds (QECBs) & Quarterly Tax Credit
The 2009 Recovery Act increases the national bond volume limitation for QECBs issued by state and local governments and certain other qualifying entities to $3.2 billion, up from $800 million. QECBs are designed to finance a broad range of conservation programs. Instead of receiving interest payments, the holder of a QECB receives a quarterly tax credit. Based on past experience, we expect that these bonds will be oversubscribed, so qualifying entities will need to act quickly to position themselves for an application.

Alternative-Energy Refueling Tax Credit
The 2009 Recovery Act increases the tax credit for qualified alternative-energy refueling properties from 30% to 50%, and the maximum credit is increased from $30,000 to $50,000. Hydrogen refueling properties are not eligible for the 50% tax credit and remains at 30%; however, the Act increases the maximum credit available to hydrogen refueling properties to $200,000. Qualified refueling properties must be placed in service during 2009 or 2010.