Interim Tax Guidance
October 5, 2012
Dear Renewable Energy Stakeholders:
The Department of Revenue (“Department”) wishes to thank those stakeholders who attended the rule-making public meeting for WAC 458-20-273 (“Rule 273”) held on August 30, 2012, as well as those who submitted written comments. The Department is still going through all the stakeholders’ comments. However, some stakeholders have asked for immediate guidance on two issues for purposes of determining incentive payments for electrical generation from systems through June 30, 2012.
Therefore, the Department is issuing this interim guidance that provides a safe harbor to any light and power business that makes an incentive payment affected by these issues for electricity generated by a renewable energy system through June 30, 2012. This interim guidance is not mandatory and does not require any light and power business to change its practices. It is intended to protect community-solar participants and participating light and power businesses by ensuring that a light and power business will not have its credit on its public utility tax reduced during this interim period because of incentive payments that may be affected by these two issues.
For all stakeholders, please realize that the Department cannot adopt a final position on these two issues until the rule making is complete and an updated rule adopted. All stakeholders are invited to provide further comments to the Department on these issues as no final determinations have been made, including whether the protections afforded by this interim guidance should extend beyond June 30, 2012.
The Department’s interim guidance on the two issues potentially affecting the incentive payments presently being made by light and power businesses is as follows.
Whether participants in a standard community solar project described by RCW 82.16.110 (2)(a)(i) or a company-owned community solar project described in RCW 82.16.110 (2)(a)(iii) have to be customers of the light and power business in whose service area the system is located.
For electrical generation from renewable energy systems through June 30, 2012, participants of these two types of community similar projects do not have to be customers of the light and power business serving the area where the system is located. However, all the systems must be located in Washington.
Further, for electrical generation from renewable energy systems through June 30, 2012, all participants in the standard community solar project described by RCW 82.16.110 (2)(a)(i) must reside in Washington at the time they make their actual investment in the system. After participants make their investment as a resident of Washington they may later move out of state and maintain their participation in the community solar project.
Whether a husband and wife living in one household that participate in a standard community solar project described by RCW 82.16.110 (2)(a)(i) or a company-owned community solar project described in RCW 82.16.110 (2)(a)(iii) are entitled to two individual or one household annual $5,000.00 limit.
For electrical generation from renewable energy systems through June 30, 2012, two individuals living in one household as a husband and wife or domestic partnership with one customer account will have the option of either investing as a household having one annual limit or as separate individuals each having their own separate annual limit. Thus for example, a husband and wife may each invest as individuals and each receive their own $5,000 annual limit.
Again, thank you for your comments and input at the public rule-making meeting. The Department is continuing to review comments and hopes to soon schedule a public hearing on a new proposed rule draft. If you have any questions, contact Mark Bohe at either (360) 534-1574 or email@example.com.