Report Title:

Energy Storage System Tax Credit

Description:

Provides a tax credit for the cost of energy storage systems installed for the storage of electricity or another useful energy product created by electricity in order to shift electric load to off-peak periods.

THE SENATE

S.B. NO.

1114

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to an energy storage system tax credit.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Energy storage; income tax credit. (a) Each individual and corporate resident taxpayer who files an individual or corporate net income tax return for a taxable year may claim a tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit may be claimed for any energy storage system in an amount not to exceed thirty-five per cent of the total cost of the energy storage system or $500,000, whichever is less; provided that the tax credit shall apply only to the actual cost of the energy storage system, its accessories, and installation and shall not include the cost of consumer incentive premiums unrelated to the operation of the energy storage system offered with the sale of the energy storage system. The credit shall be claimed against net income tax liability for the year in which the energy storage system was purchased and placed in use; provided the tax credit shall apply only to energy storage systems which are installed and placed in service after December 31, 2004, but before June 30, 2012.

Tax credits that exceed the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for every eligible energy storage system that is installed and placed in service by the entity. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined pursuant to section 235-110.7(a).

(b) As used in this section, "energy storage system" refers to any device, container, or other physical medium that is installed for or converted to the storage of electricity or some energy product created by electricity, including any necessary accessories, components, and controls that are part of the energy storage system; provided, however, that any such energy storage system must be specifically designed or used to store electricity or some energy product created by electricity for the primary purpose of shifting the consumption of grid electricity to off-peak periods, thereby reducing the use of fossil fuel.

(c) The director of taxation shall prepare forms as necessary to claim a credit under this section. The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for credit made under this section and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section."

SECTION 2. Section 241-4.6, Hawaii Revised Statutes, is amended to read as follows:

"§241-4.6 Renewable energy technologies[;] and energy storage systems; income tax credit. (a) The renewable energy technologies income tax credit provided under section 235-12.5 shall be operative for this chapter for taxable years beginning after December 31, 2002; provided that the system was installed after June 30, 2003.

(b) The energy storage systems income tax credit provided under section 235-   shall be operative for this chapter for taxable years beginning after December 31, 2004; provided that the system was installed after December 31, 2004."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2004.

INTRODUCED BY:

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