§ 105-130.25. Credit against corporate income tax for construction of cogenerating power plants.
§105‑130.25. Credit against corporate income tax for construction ofcogenerating power plants.
(a) Credit. Acorporation or a partnership, other than a public utility as defined in G.S. 62‑3(23),that constructs a cogenerating power plant in North Carolina is allowed as acredit against the tax imposed by this Part an amount equal to ten percent(10%) of the costs paid during the taxable year to purchase and install theelectrical or mechanical power generation equipment of that plant. The creditmay not be taken for the year in which the costs are paid but shall be takenfor the taxable year beginning during the calendar year following the calendaryear in which the costs were paid. To be eligible for the credit allowed bythis section, the corporation or partnership must own or control the powerplant at the time of construction. The credit allowed by this section may notexceed the amount of tax imposed by this Part for the year reduced by the sumof all credits allowed, except payments of tax made by or on behalf of thetaxpayer.
(b) Cogenerating PowerPlant Defined. For purposes of this section, a cogenerating power plant is apower plant that sequentially produces electrical or mechanical power anduseful thermal energy using natural gas as its primary energy source.
(c) Alternative Method. A taxpayer eligible for the credit allowed by this section may elect to treatthe costs paid during an earlier year as if they were paid during the year theplant becomes operational. This election must be made on or before April 15following the calendar year in which the plant becomes operational. Theelection must be in the form prescribed by the Secretary and must contain anysupporting documentation the Secretary may require. An election with respect tocosts paid by a partnership must be made by the partnership and is binding onany partners to whom the credit is passed through.
The costs with respect towhich this election is made will be treated, for the purposes of this section,as if they had actually been paid in the year the plant becomes operational. Ifa taxpayer makes this election, however, the credit may not exceed one‑fourththe amount of tax imposed by this Part for the year reduced by the sum of allcredits allowed, except payments of tax by or on behalf of the taxpayer, butany unused portion of the credit may be carried forward for the next 10 taxableyears. An election made under this subsection is irrevocable.
(d) Application. Tobe eligible for the credit allowed in this section, a taxpayer must file anapplication for the credit with the Secretary on or before April 15 followingthe calendar year in which the costs were paid. The application shall be in theform prescribed by the Secretary and shall include any supporting documentationthe Secretary may require. An application with respect to costs paid by apartnership must be made by the partnership on behalf of its partners.
(e) Ceiling. Thetotal amount of all tax credits allowed to taxpayers under this section forpayments for construction and installation made in a calendar year may notexceed five million dollars ($5,000,000). The Secretary shall calculate thetotal amount of tax credits claimed from the applications filed pursuant tosubsection (d). If the total amount of tax credits claimed for payments made ina calendar year exceeds five million dollars ($5,000,000), the Secretary shallallow a portion of the credits claimed by allocating the total allowable amountamong all taxpayers claiming the credits in proportion to the size of thecredit claimed by each taxpayer. In no case may the total amount of all taxcredits allowed under this section for costs paid in a calendar year exceedfive million dollars ($5,000,000).
If a credit claimed under thissection is reduced as provided in this subsection, the Secretary shall notifythe taxpayer of the amount of the reduction of the credit on or before December31 of the year the taxpayer applied for the credit. The amount of the reductionof the credit may be carried forward and claimed for the next 10 taxable yearsif the taxpayer reapplies for a credit for the amount of the reduction, asprovided in subsection (d). In such a reapplication, the costs for which acredit is claimed shall be considered as if they had been paid in the yearpreceding the reapplication. The Secretary's allocations based on applicationsfiled pursuant to subsection (d) are final and shall not be adjusted to accountfor credits applied for but not claimed. (1979, c. 801, s. 34; 1993(Reg. Sess., 1994), c. 674, ss. 1, 2, 4; 1995, c. 17, s. 2; 1998‑98, s.69.)