§ 44-11-11.1 - Amortization of air or water pollution prevention or hazardous solid waste control facilities.
SECTION 44-11-11.1
§ 44-11-11.1 Amortization of air or waterpollution prevention or hazardous solid waste control facilities. – (a) General rule. Every taxpayer, at his or her election, is entitled toa deduction with respect to the amortization of the adjusted basis, fordetermining gain, of any treatment facility, as defined in subsection (d) ofthis section, based on a period of sixty (60) months. The amortizationdeduction shall be an amount, with respect to each month of the period withinthe taxable year, equal to the adjusted basis of the facility at the end of themonth divided by the number of months, including the month for which thededuction is computed, remaining in the period. The adjusted basis at the endof the month shall be computed without regard to the amortization deduction forthe month.
(2) The amortization deduction with respect to any monthshall be in lieu of the depreciation deduction with respect to the facility forthe month provided for under § 44-11-11. The sixty (60) month period shallbegin as to any prevention or treatment facility, at the election of thetaxpayer, with the month following the month in which the facility wascompleted, or with the succeeding taxable year.
(b) Election of amortization. The election of thetaxpayer under subsection (a) of this section to take the amortizationdeduction and to begin the sixty (60) month period with the month following themonth in which the facility was completed shall be made only by a statement tothat effect in the return for the taxable year in which the facility wascompleted. The election of the taxpayer under subsection (a) of this section totake the amortization deduction and to begin the period with the taxable yearsucceeding the year shall be made only by a statement to that effect in thereturn for the succeeding taxable year.
(c) Termination of amortization deduction. A taxpayerwhich has elected under subsection (b) of this section to take the amortizationdeduction provided in subsection (a) of this section may, at any time aftermaking the election, discontinue the amortization deduction with respect to theremainder of the amortization period, the discontinuance to begin as of thebeginning of any month specified by the taxpayer in a notice, in writing, filedwith the tax administrator before the beginning of the month. The depreciationdeduction provided for under § 44-11-11 shall be allowed, beginning withthe first month as to which the amortization deduction does not apply, and thetaxpayer shall not be entitled to any further amortization deduction withrespect to the treatment facility.
(d) Treatment facility. For purposes of this section,"treatment facility" means any land, facility, device, building, machinery, orequipment, the construction, reconstruction, erection, installation, oracquisition of which: (1) is in furtherance of or in compliance with federal orstate requirements or standards for the control of water or air pollution orcontamination; (2) has been made by the taxpayer primarily to control thepollution or chapter 25 of title 23, respectively; and (3) has been certifiedas approved in an order contamination of the water or the air of the state asdefined in chapter 12 of title 46 and entered by the director of environmentalmanagement. This provision applies only to water and air pollution controlproperties and facilities that are installed for the treatment of waste watersand air contaminants resulting from industrial processing. It applies only towater or air pollution control properties and facilities placed in operationfor the first time after April 13, 1970.
(e) Prevention facility. For purposes of this section,"prevention facility" means any land, facility, device, building, machinery, orequipment, the construction, reconstruction, erection, installation, oracquisition of which: (1) is in furtherance of or in compliance with federal orstate requirements or standards for the prevention of water or air pollution orcontamination; (2) has been made by the taxpayer primarily to prevent thepollution or contamination of the water or the air of the state as defined inchapter 12 of title 46 and chapter 25 of title 23, respectively; and (3) hasbeen certified as approved by the director of environmental management. Thisprovision applies only to water and air pollution prevention properties andfacilities that are installed for the prevention of wastewaters, aircontaminants, and hazardous solid wastes resulting from industrial processing.The prevention facility amortization deduction shall be available prospectivelyon July 13, 2000.
(f) Certificate of compliance. Any taxpayer who hasadopted a "treatment facility" as defined in subsection (d) of this sectionshall be entitled to the deduction afforded in subsection (a) of this section;provided, that in no event shall an amortization deduction be allowed inrespect to any "treatment facility" for any taxable year unless an attestedcopy of the order of approval of the facility entered by the director ofenvironmental management and a written statement of the department certifyingthat the installation of the facility has been completed and that it is inproper operation are provided to the tax administrator at the time of filing ofthe taxpayer's return.
(g) Deduction from apportioned net income. Thededuction taken under subsection (a) of this section on any treatment facilityshall, in the case of a taxpayer whose income is subject to apportionment underthe provisions of § 44-11-14, be deducted from the portion of its entirenet income allocated to this state; provided, that its entire net income iscomputed without any deduction for depreciation or amortization of any facility.
(h) Amortization not to exceed cost. The total of alldeductions for depreciation and amortization of any treatment facility allowedpursuant to the provisions of this and the succeeding section shall not exceedits cost.
(i) Amortization in excess of depreciation. Gain fromthe sale or exchange of any treatment facility which has been sold or exchangedby a taxpayer which has been constructed, reconstructed, erected, installed, oracquired the facility as provided under subsection (f) of this section and hastaken the deduction provided by subsection (a) of this section, to the extentthat the adjusted basis of the facility is less than its adjusted basisdetermined by the method provided for under § 44-11-11, shall beconsidered additional net income. In the case of a taxpayer whose net income issubject to apportionment under the provisions of § 44-11-14, theadditional net income shall be specifically allocated to this state and is notsubject to apportionment.