Income Tax Subtraction for Energy-Efficient Residences

April 21, 2011

Summary

This incentive is not applicable to homes constructed after December 31, 2010. Arizona provides an individual income tax subtraction to taxpayers who sell one or more energy efficient single family residences, condominiums or town houses. The credit may be claimed in the year that the house is sold. It is equal to 5% of the sales price excluding commissions, taxes, interest, points, and other brokerage, finance and escrow charges and cannot exceed $5,000. Energy efficient residences include new single family-residences, condominiums, or town houses that exceed the 1995 Model Energy Code Threshold by at least 50% (90 points) as determined by an approved rating program. The subtraction is valid for taxable years beginning after December 31, 2001 and ending before December 31, 2010. The taxpayer may elect to transfer a subtraction under this section to the purchaser of the residence or to the financial institution that secures a mortgage or deed of trust on the residence. To complete the transfer, the taxpayer must prepare a written statement that the taxpayer has elected not to claim the subtraction and that the purchaser or financial institution may claim the subtraction Instructions for receiving the subtraction can be found in the instructions for Form 140, available under “Forms and Instructions” at www.revenue.state.az.us.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Arizona
Incentive Type: Personal Tax Deduction
Web Site: http://www.azcommerce.com/Energy/Energy-Related+Incentives.htm
Administrator: Arizona Department of Revenue
Start Date: 12/31/01
Eligible Renewable/Other Technologies:
  • Comprehensive Measures/Whole Building
Incentive Amount: 5% of sales price excluding commissions, taxes, interest, points, and other brokerage, finance and escrow charges
Maximum Incentive: $5,000

Authorities

Name: A.R.S. § 43-1031
Effective Date: 12/31/01
Expiration Date: 12/31/10

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.