Printer Friendly Document - State Incentives

Solar and Wind Energy Device Franchise Tax Deduction

Incentive Type
Corporate Deduction
State
Texas 
Eligible Renewable Tech.
Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind 
Applicable Sectors
 Commercial, Industrial 
Amount
 10% of amortized cost
Max. Incentive
 None 
Website

 http://www.seco.cpa.state.tx.us/
re_incentives-taxcode-statutes.htm#171107 
Authority 1
 Texas Tax Code § 171.107 
Date Enacted
 1981 (subsequently amended)
Date Effective
 1982 

Summary:
Texas allows a corporation or other entity subject the state franchise tax to deduct the cost of a solar energy device from the franchise tax. Entities are permitted to deduct 10% of the amortized cost of the system from their apportioned margin. This treatment is effective January 1, 2008 and replaces prior tax law that allowed a company to deduct (1) the total cost of the system from the company’s taxable capital; or, (2) 10% of the system’s cost from the company’s earned surplus (i.e., income). The franchise tax is Texas's equivalent to a corporate tax.  
 
For the purposes of this deduction, a solar energy device means "a system or series of mechanisms designed primarily to provide heating or cooling or to produce electrical or mechanical power by collecting and transferring solar-generated energy. The term includes a mechanical or chemical device that has the ability to store solar-generated energy for use in heating or cooling or in the production of power." Under this definition wind energy is also included as an eligible technology.  
 
Texas also offers a franchise tax exemption for manufacturers, seller, or installers of solar energy systems which also includes wind energy as an eligible technology.



Contact: 
Teresa Bostick 
Comptroller of Public Accounts 
Tax Policy Division - Franchise Tax 
Post Office Box 13528, Capitol Station 
Austin, TX 78711-3528 
Phone: (800) 531-5441 Ext.5-9952
Phone 2: (512) 305-9952
E-Mail: teresa.bostick@cpa.state.tx.us
Web Site: http://www.window.state.tx.us/taxinfo/franchise/


For more questions, please visit our website at: www.NovastarEnergy.com
Or call us, at: 210-853-5330