Oregon Enacts New Renewable Energy Equipment Manufacturing Facility Tax Credit

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Oregon enacted legislation creating a new tax credit for the certified costs of a renewable energy resource equipment manufacturing facility. [H.B. 2523, enacted 6/23/11]

The credit can be taken against the corporate income tax and the corporate excise tax.

The legislation defines a “renewable energy resource equipment manufacturing facility” as any structure, building, installation, excavation, device, machinery, or equipment that is used primarily to manufacture:

  • component parts of electric vehicles;
  • electric vehicles;
  • equipment, machinery, or other products that uses a renewable energy resource; or
  • renewable energy storage devices.

The total amount of credit cannot exceed 50 percent of the certified cost of the facility. The credit is allowed for 10 percent of the certified costs in each of five years. Any unused credit can be carried forward for up to eight years.

To be eligible for the credit:

  • the facility must be located in Oregon,
  • the facility must have received final certification from the Oregon Business Development Department and the Oregon Department of Energy, and
  • the taxpayer must be an eligible applicant.

The credit is subject to suspension or revocation if the certification was obtained by fraud or misrepresentation, the taxpayer fails to construct or operate the facility, or the facility is no longer in operation.

The credit is not allowed unless the taxpayer receives preliminary certification before Jan. 1, 2014.

The legislation also amended the business energy tax credit to include renewable energy resource equipment manufacturing facilities.

The legislation takes effect Oct. 1.

Full text of the legislation is available at http://www.leg.state.or.us/11reg/measpdf/hb2500.dir/hb2523.en.pdf.

By Denise Ryan

For a discussion of energy tax credits in Oregon, see 1480 T.M., Credits and Incentives: Oregon Through Wyoming, at 1480.06.C.