What's happening
This bill creates a tax credit for New York residents who install geothermal energy systems in their homes, up to $5,000.
Why it matters
Encourages adoption of clean energy. by reducing the upfront and ongoing costs for homeowners, potentially accelerating the shift away from fossil fuel-based heating and cooling systems and reducing household carbon footprints.
Covers various ownership and usage models. including purchases, long-term leases, and power purchase agreements—making geothermal systems accessible to more residents, including those who may not be able to afford an outright purchase.
Accommodates multi-family dwellings. by allowing prorated tax credits for shared systems in co-ops and condos, which encourages collective investment in geothermal technology and broadens the potential impact in urban or high-density areas.
Allows credit carryover. for up to five years if the credit exceeds the taxpayer’s liability in a given year, making the incentive more financially useful for households with lower annual tax burdens and ensuring they can still benefit fully from the credit.
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Who cares
New York residents installing geothermal systems
The bill would offer an income tax credit equal to 25% of qualified costs, capped at $5,000, for systems serving their principal residences, with unused credits carried forward for up to five years.
Geothermal equipment installers and leasing providers
Qualified expenditures would include equipment, installation and related design services, as well as payments under equipment leases or power purchase agreements lasting at least ten years.
Condominium owners and co-op tenant-stockholders
They could claim their proportionate share of qualifying geothermal installation expenses incurred by their condominium association or cooperative housing corporation.
New York State tax administrators
They would administer the new credit, including rules for shared expenses, grants and multiyear lease or power purchase payments.
Headline styles
Geothermal Energy Tax Credit
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to ways and means
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Geothermal Energy Tax Credit
In Senate Committee · Investigations And Government Operations · Sponsor Timothy M. Kennedy
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
9803
IN ASSEMBLY
February 13, 2020
Introduced by M. of A. RYAN, CARROLL -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to establishing a credit for geothermal energy systems
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 606 of the tax law is amended by adding a new subsection (g-3) to read as follows:
(g-3) Geothermal energy systems credit. (1) General. An individual taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty-five percent of qualified geothermal energy system expenditures, except as provided in subparagraph (D) of paragraph two of this subsection. This credit shall not exceed five thousand dollars for a qualified geothermal energy system placed in service on or after September first, two thousand twenty.
(2) Qualified geothermal energy systems expenditures. (A) The term "qualified geothermal energy system expenditures" means expenditures for:
(i) the purchase of geothermal energy system equipment which is installed in connection with residential property which is (I) located in this state and (II) which is used by the taxpayer as his or her principal residence at the time the geothermal energy system equipment is placed in service;
(ii) the lease of geothermal energy system equipment under a written agreement that spans at least ten years where such equipment owned by a person other than the taxpayer is installed in connection with residential property which is (I) located in this state and (II) which is used by the taxpayer as his or her principal residence at the time the geothermal energy system equipment is placed in service; or
(iii) the purchase of power under a written agreement that spans at least ten years whereunder the power purchased is generated by geothermal energy system equipment owned by a person other than the taxpayer which is installed in connection with residential property which is (I) located in this state and (II) used by the taxpayer as his or her prin-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05723-03-0
A. 9803 2
cipal residence at the time the geothermal energy system equipment is placed in service.
(B) Such qualified expenditures shall include expenditures for materials, labor costs properly allocable to on-site preparation, assembly and original installation, architectural and engineering services, and designs and plans directly related to the construction or installation of the geothermal energy system equipment.
(C) Such qualified expenditures for the purchase of geothermal energy system equipment shall not include interest or other finance charges.
(D) Such qualified expenditures for the lease of geothermal energy system equipment or the purchase of power under an agreement described in clause (ii) or (iii) of subparagraph (A) of this paragraph shall include an amount equal to all payments made during the taxable year under such agreement. Provided, however, such credits shall only be allowed for fourteen years after the first taxable year in which such credit is allowed. Provided further, however, the twenty-five percent limitation in paragraph one of this subsection shall only apply to the total aggregate amount of all payments to be made pursuant to an agreement referenced in clause (ii) or (iii) of subparagraph (A) of this paragraph, and shall not apply to individual payments made during a taxable year under such agreement except to the extent such limitation on an aggregate basis has been reached.
(3) Geothermal energy system equipment. The term "geothermal energy system equipment" shall mean a system whose original use begins with the taxpayer; which meets the eligibility criteria, if any, prescribed by the department; and which is a ground coupled solar thermal system that utilizes the solar thermal energy stored in the ground or in bodies of water to produce heat, and which is commonly known as or referred to as a ground source heat pump system.
(4) Multiple taxpayers. Where geothermal energy system equipment is purchased and installed in a principal residence shared by two or more taxpayers, the amount of the credit allowable under this subsection for each such taxpayer shall be prorated according to the percentage of the total expenditure for such geothermal energy system equipment contributed by each taxpayer.
(5) Proportionate share. Where geothermal energy system equipment is purchased and installed by a condominium management association or a cooperative housing corporation, a taxpayer who is a member of the condominium management association or who is a tenant-stockholder in the cooperative housing corporation may for the purpose of this subsection claim a proportionate share of the total expense as the expenditure for the purposes of the credit attributable to his principal residence.
(6) Grants. For purposes of determining the amount of the expenditure incurred in purchasing and installing geothermal energy system equipment, the amount of any federal, state or local grant received by the taxpayer, which was used for the purchase and/or installation of such equipment and which was not included in the federal gross income of the taxpayer, shall not be included in the amount of such expenditures.
(7) When credit allowed. The credit provided for herein shall be allowed with respect to the taxable year, commencing after two thousand twenty-one, in which the geothermal energy system equipment is placed in service.
(8) Carryover of credit. If the amount of the credit, and carryovers of such credit, allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, such excess amount may be carried over to the five taxable years next following the taxable year
A. 9803 3
with respect to which the credit is allowed and may be deducted from the taxpayer's tax for such year or years.
§ 2. This act shall take effect immediately and shall apply to taxable years commencing on and after January 1, 2021.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.