Incentives Watch: Fate of the Production Tax Credit Hangs in the Balance as Debate Continues

Congress is once again getting pressure from both sides to do something with the production tax credit. 

The production tax credit equals up to 2.3¢ per kilowatt hour of electricity produced from certain qualified energy resources at a qualified facility for 10 years after the facility is placed in service. The American Taxpayer Relief Act of 2012 (ATRA) extended the production tax credit for qualified wind energy facilities from Jan. 1, 2013, to Jan. 1, 2014.

In addition, the ATRA amended the definition of “qualified facilities” by providing that wind and geothermal facilities that begin construction prior to Jan. 1, 2014, now qualify. Previously, the facility had a “place in service date” requirement, so the new “construction start date” requirement is less restrictive for renewable energy projects seeking to take advantage of the credit.

Despite the extension, several organizations are asking Congress to do away with the tax credit altogether by letting it expire at the end of the year, according to an article in Bloomberg BNA’s Green Incentives Monitor.  A total of 102 organizations, including Citizens for Responsible Energy Development (CRED) and Taxpayers for Common Sense, signed the letter that was sent to Congress on November 5.

On the other hand, other organizations, such as the American Wind Energy Association, argue the tax credit should be extended.

However, Congress may end up letting certain tax credits, including the production tax credit, expire at the end of the year, so it can focus on comprehensive tax reform instead, notes a Bloomberg BNA Green Incentives Monitorarticle.

For more information about the various renewable energy tax credits and incentives, check out Bloomberg BNA’s Green Incentives Navigator.

In other developments . . .

The Massachusetts Department of Revenue finalized guidance on the state's brownfield site cleanup credit and the community investment credit, according to a Bloomberg BNA Weekly State Tax Reportarticle.

By: Kathleen Caggiano

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