§ 476B.6 — Tax credit certificate procedure

Iowa § 476B.6

• Jurisdiction: Iowa
• Title XI: NATURAL RESOURCES
• Ch. 476B: WIND ENERGY PRODUCTION TAX CREDIT

Text

1. a. If a city or a county in which a qualified facility is located has enacted an ordinance
under section 427B.26 and an owner has filed for and received special valuation pursuant to
that ordinance, the owner is not required to obtain approval from the city council or county
boardofsupervisorstoapplyforthewindenergyproductiontaxcreditpursuanttosubsection
2.
b. (1) If neither a city nor a county in which a qualified facility is located has enacted an
ordinance under section 427B.26, or a qualified facility is not eligible for special valuation
pursuant to an ordinance adopted by a city or a county under section 427B.26, the owner
must receive approval of the applicable city council or county board of supervisors of the
city or county in which the qualified facility is located in order to be eligible to receive the
wind energy production tax credit. The application for approval may be submitted prior to
commencement of the construction of the qualified facility but shall be submitted no later
than the close of the owner’s first taxable year for which the credit is to be applied for. The
3 WIND ENERGY PRODUCTION TAX CREDIT, §476B.6
application must contain the owner’s name and address, the address of the qualified facility,
andthedatesoftheowner’sfirstandlasttaxableyearsforwhichthecreditwillbeappliedfor.
Within forty-five days of the receipt of the application for approval, the city council or county
board of supervisors, as applicable, shall either approve or disapprove the application. After
the forty-five-day time period has expired, the application is deemed to be approved.
(2) Upon approval of an application submitted pursuant to subparagraph (1), the owner
may apply for the tax credit as provided in subsection 2. In addition, approval of the
application submitted pursuant to subparagraph (1) is acceptance by the applicant for the
assessment of the qualified facility for property tax purposes for a period of twelve years
and approval by the city council or county board of supervisors, as applicable, for the
payment of the property taxes levied on the qualified property to the state. For purposes
of property taxation, the qualified facility receiving approval of an application submitted
pursuant to subparagraph (1) shall be centrally assessed and shall be exempt from any
replacement tax under section 437A.6 for the period during which the facility is subject to
property taxation. The property taxes to be paid to the state are those property taxes which
make up the consolidated tax levied on the qualified facility and which are due and payable
in the twelve-year period beginning with the first fiscal year beginning on or after the end
of the owner’s first taxable year for which the credit is applied for. Upon approval of the
application, the city council or county board of supervisors, as applicable, shall notify the
county treasurer to designate on the tax statement which lists the taxes on the qualified
facility the amount of the property taxes to be paid to the department. Payment of the
designated property taxes to the department shall be in the same manner as required for
the payment of regular property taxes and failure to pay designated property taxes to the
department shall be treated the same as failure to pay property taxes to the county treasurer.
c. Once the owner of the qualified facility receives approval under paragraph “b”,
subsequent approval under paragraph “b” is not required for the same qualified facility for
subsequent taxable years.
2. An owner of a qualified facility may apply to the commission for the wind energy
production tax credit by submitting to the commission all of the following:
a. A completed application in a form prescribed by the commission.
b. A copy of the determination granting approval of the facility as a qualified facility by
the commission.
c. A copy of a signed power purchase agreement or other agreement to purchase
electricity.
d. Sufficientdocumentationthattheelectricityhasbeengeneratedbythequalifiedfacility
and sold to a purchaser.
e. For a facility in which electricity is used for on-site consumption, the requirements of
paragraphs “c” and “d” shall not be applicable. For such facilities, the owner must submit a
certification under penalty of perjury that the claimed amount of electricity was generated by
the qualified facility and consumed by the owner.
f. Any other information the commission deems necessary.
3. The commission shall notify the department of the amount of kilowatt-hours generated
and purchased from a qualified facility or generated and used on-site by a qualified facility.
The department shall calculate the amount of the tax credit for which the applicant is eligible
and shall issue the tax credit certificate for that amount or notify the applicant in writing
of its refusal to do so. An applicant whose application is denied may file an appeal with the
department within sixty days from the date of the denial pursuant to the provisions of chapter
17A.
4. Each tax credit certificate shall contain the owner’s name, address, and tax
identification number, the amount of tax credits, the first taxable year the certificate may be
used, the type of tax to which the tax credits shall be applied, and any other information
required by the department. The tax credit certificate shall only list one type of tax to which
the amount of the tax credit may be applied. Once issued by the department, the tax credit
certificate shall not be terminated or rescinded.
5. A tax credit certificate may be filed pursuant to any of the following, to the extent
applicable:
§476B.6, WIND ENERGY PRODUCTION TAX CREDIT 4
a. If the tax credit application is filed by a partnership, limited liability company, S
corporation, estate, trust, or other reporting entity all of the income of which is taxed directly
to its equity holders or beneficiaries, for the taxes imposed under chapter 422, subchapter
II or III, the tax credit certificate shall be issued directly to equity holders or beneficiaries
of the applicant in proportion to their pro rata share of the income of such entity. The
applicant shall, in the application made under this section, identify its equity holders or
beneficiaries, and the percentage of such entity’s income that is allocable to each equity
holder or beneficiary.
b. If the tax credit applicant under this section is eligible to receive renewable electricity
production credits authorized under section 45 of the Internal Revenue Code, as amended,
and the tax credit applicant is a partnership, limited liability company, S corporation, estate,
trust, or other reporting entity all of the income of which is taxed directly to its equity
holders or beneficiaries, for the taxes imposed under chapter 422, subchapter II or III, the
tax credit certificate may be issued to a partner if the business is a partnership, a shareholder
if the business is an S corporation, or a member if the business is a limited liability company
in the amounts designated by the eligible partnership, S corporation, or limited liability
company. In absence of such designation, the credits under this section shall flow through
to the partners, shareholders, or members in accordance with their pro rata share of the
income of the entity. The applicant shall, in the application made under this section, identify
the holders or beneficiaries that are to receive the tax credit certificates and the percentage
of the tax credit that is allocable to each holder or beneficiary.
c. If an applicant under this section is eligible to receive renewable electricity production
credits authorized under section 45 of the Internal Revenue Code, as amended, and the tax
credit applicant is a partnership, limited liability company, S corporation, estate, trust, or
other reporting entity all of the income of which is taxed directly to its equity holders or
beneficiaries, for the taxes imposed under chapter 422, subchapter II or III, the tax credit
certificates and all future rights to the tax credit in this section may be distributed to an
equity holder or beneficiary as a liquidating distribution or portion thereof, of a holder or
beneficiary’s interest in the applicant entity. The applicant shall, in the application made
underthissection,designatethepercentageofthetaxcreditallocabletotheliquidatingequity
holder or beneficiary that is to receive the current and future tax credit certificates under this
section.
d. If the tax credit application is filed by a partnership, limited liability company, S
corporation, estate, trust, or other reporting entity, all of the income of which is taxed directly
to its equity holders or beneficiaries for the taxes imposed under chapter 422, subchapter V,
or under chapter 423, 432, or 437A, the tax credit certificate shall be issued directly to the
partnership, limited liability company, S corporation, estate, trust, or other reporting entity.
6. The department shall not issue a tax credit certificate if the facility approved by the
commissionasaqualifiedfacilityisnotoperationalwithineighteenmonthsaftertheapproval
is issued.
7. Once a tax credit certificate is issued pursuant to this section, the tax credit may only
be claimed against the type of tax reflected on the certificate.
8. A tax credit certificate shall not be used or included with a return filed for a taxable
year beginning prior to July 1, 2006.