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          House Engrossed
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  State of Arizona
  House of Representatives
  Forty-eighth Legislature
  First Regular Session
  2007
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       CHAPTER 180
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     HOUSE BILL 2491
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AN ACT

AMENDING SECTIONS 43-1085 AND 43-1164, ARIZONA REVISED STATUTES; RELATING TO INCOME TAX CREDITS.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 43-1085, Arizona Revised Statutes, is amended to read:

43-1085. Credit for solar energy devices; commercial and industrial applications

A. For taxable years beginning from and after December 31, 2005 through December 31, 2012, a credit is allowed against the taxes imposed by this title for installing A TAXPAYER WHO IS EITHER:

1. INSTALLING one or more solar energy devices, as defined in section 42-5001 and certified pursuant to section 41-1501.10 41-1510.01, during the taxable year for commercial, or industrial purposes OR ANY OTHER NONRESIDENTIAL APPLICATION in the taxpayer's trade or business FACILITY located in this state. or

2. Financed, by a THE third party organization THAT FINANCED, INSTALLED OR MANUFACTURED THE SOLAR ENERGY DEVICE THAT QUALIFIES FOR THE CREDIT UNDER PARAGRAPH 1 OF THIS SUBSECTION IF THE TAXPAYER OR AN ENTITY EXEMPT FROM TAXATION UNDER CHAPTER 12 OF THIS TITLE WHO OTHERWISE WOULD QUALIFY FOR THIS CREDIT TRANSFERS THE CREDIT ON A FORM PRESCRIBED BY THE DEPARTMENT TO THE THIRD PARTY ORGANIZATION.

B. The amount of the credit is equal to ten per cent of the installed cost of the device.

C. The person who provides or installs the device shall furnish the taxpayer with an accounting of the cost to the taxpayer.

D. The taxpayer may not cumulate total tax credits under this section exceeding twenty-five thousand dollars with respect to the same building in the same year or fifty thousand dollars in total credits in any year.

E. If the allowable credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset taxes under this title may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.

F. Co-owners of a business, including partners in a partnership and shareholders of an S corporation, as defined in section 1361 of the internal revenue code, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest or financial investment in the system. The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

Sec. 2. Section 43-1164, Arizona Revised Statutes, is amended to read:

43-1164. Credit for solar energy devices; commercial and industrial applications

A. For taxable years beginning from and after December 31, 2005 through December 31, 2012, a credit is allowed against the taxes imposed by this title for installing A TAXPAYER THAT IS EITHER:

1. INSTALLING one or more solar energy devices, as defined in section 42-5001 and certified pursuant to section 41-1501.10 41-1510.01, during the taxable year for commercial, or industrial purposes OR ANY OTHER NONRESIDENTIAL APPLICATION in the taxpayer's trade or business FACILITY located in this state. or

2. Financed, by a THE third party organization THAT FINANCED, INSTALLED OR MANUFACTURED THE SOLAR ENERGY DEVICE THAT QUALIFIES FOR THE CREDIT UNDER PARAGRAPH 1 OF THIS SUBSECTION IF THE TAXPAYER OR AN ENTITY EXEMPT FROM TAXATION UNDER CHAPTER 12 OF THIS TITLE WHO OTHERWISE WOULD QUALIFY FOR THIS CREDIT TRANSFERS THE CREDIT ON A FORM PRESCRIBED BY THE DEPARTMENT TO THE THIRD PARTY ORGANIZATION.

B. The amount of the credit is equal to ten per cent of the installed cost of the device.

C. The person who provides or installs the device shall furnish the taxpayer with an accounting of the cost to the taxpayer.

D. The taxpayer may not cumulate total tax credits under this section exceeding twenty-five thousand dollars with respect to the same building in the same year or fifty thousand dollars in total credits in any year.

E. If the allowable credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset taxes under this title may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.

F. Co-owners of a business, including corporate partners in a partnership, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest or financial investment in the system. The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

Sec. 3. Retroactivity

This act applies retroactively to taxable years beginning from and after December 31, 2005.

APPROVED BY THE GOVERNOR MAY 4, 2007.

FILED IN THE OFFICE OF THE SECRETARY OF STATE MAY 4, 2007.