For income tax years beginning on or after January 1, 2023, but before January 1, 2025, any purchaser of an air-source heat pump system, ground-source heat pump system, water-source heat pump system, or variable refrigerant flow heat pump system (heat pump system) or a heat pump water heater that installs a residential or commercial heat pump system or a residential or commercial heat pump water heater into real property in the state is allowed an income tax credit in an amount equal to 10% of the purchase price of the heat pump system or heat pump water heater.
For income tax years beginning on or after January 1, 2023, but before January 1, 2025, any purchaser of an energy storage system that installs the energy storage system in a residential dwelling in the state is eligible for a 10% income tax credit on the purchase price.
At the time of purchase, the purchaser may assign the income tax credit to the seller of the heat pump system, heat pump water heater, or energy storage system (seller) for the heat pump system and heat pump water heater income tax credit and the energy storage system income tax credit. The seller must compensate the purchaser for the full nominal value of the tax credit if the purchaser assigns it. For the assignment of either income tax credit, the act specifies the requirements for the purchaser, seller, and department of revenue.
Decarbonizing building materials will be exempt from state sales and use tax beginning July 1, 2024. The “eligible decarbonizing building materials” are those that have a global warming potential that is within an acceptable range according to a list maintained by the Office Of The State Architect (office). An eligible material’s environmental product declaration may be submitted to the office for review. Based on the information voluntarily provided by manufacturers, the office compiles a list of eligible materials and their manufacturers.
Heat pump systems and heat pump water heaters used in commercial or residential buildings will be exempt from state sales and use taxes beginning January 1, 2023. To be eligible for the sales and use tax exemption under certain circumstances, the purchaser of the heat pump system or heat pump water heater is required to certify that all necessary mechanical, plumbing, and electrical work performed in connection with the installation of the heat pump system or heat pump water heater will be performed by a certified contractor on a certified contractor list created pursuant to current law or by employees of a utility, subject to state licensing requirements and all applicable state and local rules, codes, and standards.
As of January 1, 2023, all sales, storage, and use of energy storage systems in residential dwellings will be exempt from state sales and use taxes.
In order to exempt the same items from state sales and use tax, a statutory town, city, or county must specifically include the exemption in its initial sales tax ordinance or resolution or amend it.
In 2023, investor-owned gas utilities will be able to apply to the public utilities commission for approval to measure fuel commodity units or energy services provided for billing purposes. A utility’s application must be approved, denied, or modified by the public utilities commission.