Relates to tax credits provided for solar energy system equipment; provides credit for the lease of solar energy equipment and the purchase of power generated by solar equipment.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A34B
SPONSOR: Cahill TITLE OF BILL: An act to amend the tax law, in relation to tax cred-
its provided for solar energy system equipment
PURPOSE: The purpose of this legislation is to encourage homeowners
to install and utilize solar energy equipment by allowing individuals
who lease such equipment or purchase power under a written agreement
with a third party to benefit from a solar equipment tax credit.
SUMMARY OF PROVISIONS: Section 1. Allows a taxpayer to qualify for a
solar equipment tax credit in cases where the lease of solar equipment
under a written agreement spans at least ten years or a power purchase
agreement of at least ten years from a third party is in force. Addi-
tionally this section includes and clarifies expenditures for the lease
of solar energy system equipment.
JUSTIFICATION: As we continue to move toward a greener economy it is
very important that residents be encouraged to utilize renewable forms
of energy. This should be true whether the taxpayer can afford to
purchase and install renewable generation such as solar equipment or if
it is more feasible for the individual to lease the equipment or
contract with a provider to purchase power. Using the tax code to incen-
tivize the installation of solar equipment is the right way to encourage
the development of the renewable energy industry.
In addition to the obvious benefits to the taxpayer, the use of more
photovoltaic generation equipment will also benefit our environment by
reducing the negative effects of greenhouse gas emissions as well and
increasing our ability to become more energy independent.
LEGISLATIVE HISTORY: S.8025 of 2009-2010; Referred to Investigations
& Government Operations.
FISCAL IMPLICATIONS: Given the nature of how the credit will be taken
and the fact that the leases and power purchase agreements that are
effected all last more than ten years, it is estimated that this
provision will have a fiscal impact of less than $1,000,000 annually.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
34--B
2011-2012 Regular Sessions
IN ASSEMBLY(Prefiled)
January 5, 2011
___________
Introduced by M. of A. CAHILL -- read once and referred to the Committee
on Ways and Means -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- again
reported from said committee with amendments, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the tax law, in relation to tax credits provided for
solar energy system equipment
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraphs 1 and 2 of subsection (g-1) of section 606 of
2 the tax law, as amended by chapter 378 of the laws of 2005 and subpara-
3 graph (B) of paragraph 2 as amended by chapter 251 of the laws of 2006,
4 is amended to read as follows:
5 (1) General. An individual taxpayer shall be allowed a credit against
6 the tax imposed by this article equal to twenty-five percent of quali-
7 fied solar energy system equipment expenditures, except as provided in
8 subparagraph (D) of paragraph two of this subsection. This credit shall
9 not exceed three thousand seven hundred fifty dollars for qualified
10 solar energy equipment placed in service before September first, two
11 thousand six, and five thousand dollars for qualified solar energy
12 equipment placed in service on or after September first, two thousand
13 six.
14 (2) Qualified solar energy system equipment expenditures. (A) The term
15 "qualified solar energy system equipment expenditures" means expendi-
16 tures for:
17 (i) the purchase of solar energy system equipment which is installed
18 in connection with residential property which is [(i)] (I) located in
19 this state and [(ii)] (II) which is used by the taxpayer as his or her
20 principal residence at the time the solar energy system equipment is
21 placed in service;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00898-04-1
A. 34--B 2
1 (ii) the lease of solar energy system equipment under a written agree-
2 ment that spans at least ten years where such equipment owned by a
3 person other than the taxpayer is installed in connection with residen-
4 tial property which is (I) located in this state and (II) which is used
5 by the taxpayer as his or her principal residence at the time the solar
6 energy system equipment is placed in service; or
7 (iii) the purchase of power under a written agreement that spans at
8 least ten years whereunder the power purchased is generated by solar
9 energy system equipment owned by a person other than the taxpayer which
10 is installed in connection with residential property which is (I)
11 located in this state and (II) which is used by the taxpayer as his or
12 her principal residence at the time the solar energy system equipment is
13 placed in service.
14 (B) Such qualified expenditures shall include expenditures for materi-
15 als, labor costs properly allocable to on-site preparation, assembly and
16 original installation, architectural and engineering services, and
17 designs and plans directly related to the construction or installation
18 of the solar energy system equipment.
19 (C) Such qualified expenditures for the purchase of solar energy
20 system equipment shall not include interest or other finance charges.
21 (D) Such qualified expenditures for the lease of solar energy system
22 equipment or the purchase of power under an agreement described in
23 clauses (ii) or (iii) of subparagraph (A) of this paragraph shall
24 include an amount equal to all payments made during the taxable year
25 under such agreement. Provided, however, such credits shall only be
26 allowed for fourteen years after the first taxable year in which such
27 credit is allowed. Provided further, however, the twenty-five percent
28 limitation in paragraph one of this subsection shall only apply to the
29 total aggregate amount of all payments to be made pursuant to an agree-
30 ment referenced in clauses (ii) or (iii) of subparagraph (A) of this
31 paragraph, and shall not apply to individual payments made during a
32 taxable year under such agreement except to the extent such limitation
33 on an aggregate basis has been reached.
34 § 2. This act shall take effect immediately.
