Note: Systems entering service on or after January 1, 2021 cannot qualify for this credit. The credit will no longer be available for all systems beginning in 2022.
For tax years beginning on or after January 1, 2003 and before December 31, 2021, a state income tax credit is available to producers of electric power using renewable energy resources from a zero-emission facility located in Oklahoma. The zero-emission facility must have a rated production capacity of 1 megawatt or greater. The facility must be placed in operation after June 4, 2001, and the electricity must be sold to an unrelated party.
Eligible renewable energy resources include wind, moving water, sun, and geothermal energy. The construction and operation of the zero-emission facility must result in no pollution or emissions that are or may be harmful to the environment, as determined by the Department of Environmental Quality.
Tax Credit Amount
The amount of the credit varies depending on when the electricity is generated. Credits may be claimed for electricity generated on or after January 1, 2003, during a 10-year period following the date that the facility is placed in operation.
Facilities placed in operation before January 1, 2007:
Facilities placed in operation on or after January 1, 2007, and before January 1, 2021 (or January 1, 2017 for wind):
To claim this credit, applicants must complete Tax Form 511CR, Schedule for Other Credits.
For credits generated before January 1, 2014, the tax credit is freely transferable at any time during the 10 years following the year of qualification. This includes transfers or sales from non-taxable entities to taxable entities and transfers or sales from one taxable entity to another.
For credits generated on or after January 1, 2014, the Oklahoma Tax Commission can refund the taxpayer 85% of the face value of the tax credits at the taxpayer's request. The direct refund is available to all taxpayers including pass-through entities, but not nontaxable entities. Nontaxable entities will still be able to transfer or sell credits to taxable entities. If the taxpayer does not elect to receive a direct refund, excess credits can be allocated to one or more shareholders, partners, or members of the taxpayer entity.
Any nontaxable entities, including agencies of the State of Oklahoma or political subdivisions, are eligible to establish a transferable tax credit. This tax credit is a property right available to a state agency or political subdivision of Oklahoma to transfer or sell to a taxable entity (individual or corporate) who has an actual or anticipated income tax liability.
|Incentive Type:||Corporate Tax Credit|
|Administrator:||Oklahoma Tax Commission|
|Eligible Renewable/Other Technologies:||
|Incentive Amount:||$0.0025/kWh - $0.0075/kWh for 10 years; amount varies depending on when the facility is placed in operation and when electricity is generated.|
|Eligible System Size:||Facility must have a rated production capacity of 1 MW or greater.|
|Equipment Requirements:||Facility construction and operation must not result in the creation of pollution or emissions harmful to the environment, pursuant to determination by the DEQ.|
|Carryover Provisions:||Excess credit generated before 2014 may be carried forward up to 10 years. Credits generated after this time can be reimbursed to the taxpayer at 85% of face value or credits can be allocated to other entities.|
|Technologies:||Geothermal Electric, Solar Thermal Electric, Solar Photovoltaics, Wind (All), Hydroelectric, Wind (Small)|
|Sectors:||Commercial, Local Government, State Government|
|Parameters:||The system has a maximum of 1.00 MW|
|Name:||68 Okl. St. § 2357.32A|
|Organization:||Oklahoma Department of Commerce|
900 N. Stiles St.
Oklahoma City OK 73126
|Name:||Information Specialist - OTC|
|Organization:||Oklahoma Tax Commission|
Post Office Box 26800
Oklahoma City OK 73126-0800
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.
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