SALT Report 1499 – The Florida Legislature enacted legislation that creates new corporate income tax and sales and use tax benefits for taxpayers in the renewable energy industry. Notably, the bill reinstates two tax credits that expired in 2010 and creates a new sales and use tax exemption for the distribution of alternative fuels.
Renewable Energy Tax Credit for Certain Alternative Fuels
The Florida renewable energy tax credit has been reinstated for certain costs incurred in the production, storage, and distribution of biodiesel (B10-B100), ethanol (E10-E100), and other renewable fuels. The credit will become available beginning on or after January 1, 2013, and ending December 31, 2016. The credit is limited to 75% of all capital costs, operation and maintenance costs, and research and development costs incurred between July 1, 2012, and June 30, 2016.
The maximum credit is $1 million for individual taxpayers and up to $10 million for all taxpayers during a fiscal year. Taxpayers may carry forward any unused portion of the credit because of an insufficient tax liability beginning January 1, 2013 through December 31, 2018.
To qualify, taxpayers must submit a complete application to the Department of Agriculture and Consumer Service. Since the credit is available on a first-come, first-served basis, incomplete and placeholder applications will be rejected. Taxpayers that do not receive a credit because the credit fund has been depleted may reapply the following year and will have priority over new applicants.
Additionally, taxpayers who receive a credit may transfer their credit, in whole or in part, to any taxpayer as long as there is a written agreement in place.
Renewable Energy Production Credit
The bill reinstates an expired corporate income tax credit for facilities that generate and sell electricity from renewable energy. The credit is $0.01 per kilowatt-hour of electricity produced and sold. The credit is available for electricity produced and sold after January 1, 2013, through June 30, 2016. To remain eligible for the credit taxpayers must submit an application to the department annually.
Exemption for Materials Used in the Distribution of Alternative Fuels
A sales and use tax exemption is provided for materials used to distribute renewable fuels. Taxpayers can apply for an exemption for the materials used in the distribution of biodiesel (B10-B100), ethanol (E10-E100), and other renewable fuels and for gasoline fueling station pump retrofits. The department will provide a list of all exempt equipment, machinery, and materials eligible for the renewable energy technology exemption.
Taxpayers must apply for the exemption and, upon approval, will receive a tax refund within 30 days. This exemption is capped at $1 million per fiscal year for all taxpayers. Approvals will be granted on a first-come, first-served basis and expires on July 1, 2016.
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