What Act 131 Means for Systems Installed Before July 1, 2015
After HB 779 was signed into law becoming Act 131, we have received several email inquiries from members and friends. Many people whose solar systems were installed prior to July 1, 2015 and who have yet to file for their state tax credit want to know if and how the new law affects them. At LSES, we would like to clarify some implications of the filing procedure and cap prescribed by Act 131.
First, a quick recap of solar tax credits in Louisiana before Act 131 and after…
|Before to Act 131||After Act 131|
|Purchased systems were eligible for up to 50% of a $25,000 system ($12,500).||Purchased systems are eligible for whichever of the following is the least:1) 50% of the total cost of a system up to $20,000,2) $2 per DC watt,
or 3) $10,000
|There is no cap to tax credits.||In total, over the next 3 years, there is a 25 million dollar cap to solar tax credits– 10 million dollars for the 2016 fiscal year, 10 million dollars for the 2017 fiscal year, and 5 million dollars for any remaining claims in 2018.If the claims for 2016 exceed 10 million dollars, remaining claims will be treated as if filed for on the first filing day of 2017. If the claims for 2017 exceed 10 million dollars, remaining claims will be treated as if filed for on the first filing day of 2018. If the remaining claims for 2018 exceed 5 million dollars, then they will be disbursed pro-rata, or proportionally, based on the number of claims.|
As the law is currently written, claims will be granted on a first-come-first-served basis based on the date a claim is filed, not the date of installation.
If your system was installed before July 1, 2015, you are still eligible for a maximum credit of $12,500.
It is important to remember that if your system was installed before July 1, 2015 and you plan on filing for your credit this upcoming tax season, the 10 million dollar cap still applies to you.
This means that your claim is in the same “first-come-first-served” que as all other claims before and after July 1, 2015.
Subsequently, it also means that depending on the number of claims and when you file, your claim could be pushed back to 2017, and potentially even 2018.
All considered, be sure to file your taxes as soon as possible this year.
Our Position at LSES
At LSES, we are urging our lawmakers and the Louisiana Department of Revenue to develop a better filing system that takes into consideration date of installation, specifically one that separates claims on systems installed prior to July 1, 2015 from systems installed after to protect both customers and solar companies.
For more information, please refer to this bulletin posted by the Louisiana Department of Revenue.
If you have any questions, please email our State Coordinator at Rebecca@lses.org