5/1/2014 Income Tax Incentives, Office of State Tax Commissioner, Tax Department, North Dakota

http://www.nd.gov/tax/taxincentives/income/energycredit.html 1/2

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Income Tax Incentives

Biomass, Geothermal, Solar, or Wind Energy Credit

Note: This credit expires on December 31, 2014, andis not allowed for devices installed on or afterJanuary 1, 2015.

A corporation is allowed an income tax credit for installinga biomass, geothermal, solar, or wind energy device in abuilding or on property owned or leased in North Dakota.The credit is equal to 3% of the cost of acquisition andinstallation and is allowed in each of the first five taxyears, starting with the year in which installation iscompleted. A credit allowed to a corporation included in aconsolidated North Dakota income tax return may beused to reduce the aggregate tax liability of allcorporations included in the return. If a corporation holdsan interest in a partnership (or a limited liability companytreated like a partnership) that installs a device, thecredit is passed through to the corporation in proportionto its interest in the entity.

An individual, estate, or trust is allowed an income taxcredit for installing a geothermal energy device in abuilding or on property owned or leased in North Dakota.To qualify, the device must be installed after December31, 2008. The credit is equal to 3% of the cost ofacquisition and installation and is allowed in each of thefirst five tax years starting with the year in whichinstallation is completed. If an individual, estate, or trustholds an interest in a passthrough entity, such as a partnership or S corporation,that installs a geothermal energy device after December 31, 2008, the credit ispassed through to the individual, estate, or trust in proportion to its interest inthe entity.

For devices installed after September 30, 2008, an unused credit may be carriedforward up to ten tax years; however, the carryforward period is twenty taxyears for a wind device installed after September 30, 2009 and before January 1,2012. (For devices installed before October 1, 2008, different carryforwardperiods apply.)

If ownership of a device is transferred immediately upon completion of installation,and the device is fully operational, the credit transfers to and may be claimed bythe purchaser of the device.

[Reference: N.D.C.C. § 57-38-01.8]

5/1/2014 Income Tax Incentives, Office of State Tax Commissioner, Tax Department, North Dakota

http://www.nd.gov/tax/taxincentives/income/energycredit.html 2/2

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