Roadrunner Capitol Reports
Legislation Detail

SB 40 GEOTHERMAL HEAT PUMP TAX

Sen William Soules

Actions: [1] SCC/STBTC/SFC-SCC

Scheduled: Not Scheduled

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Summary:
 Senate Bill 40 (SB 40) extends the Geothermal Ground-Coupled Heat Pump Tax Credits and makes the income tax credit refundable. SB 40 raises the aggregate cap of the credits to $16 million and requires annual reporting by the Taxation and Revenue Department. The definition of qualifying heat pump is modified. SB 40 includes a delayed repeal. 
Legislation Overview:
 Senate Bill 40 (SB 40) extends the Geothermal Ground-Coupled Heat Pump Tax Credits, both personal and corporate. The heat pump must be purchased and installed between 2024 and 2034. The credit remains 30% of cost up to $9,000, and any amount of credit exceeding the taxpayer’s tax liability is refundable instead of being carried forward in succeeding tax years. SB 40 raises the annual aggregate total of credits from $2 million to $16 million for personal income tax filers and corporate filers. SB 40 clarifies the definition of heat pump to mean a heating and refrigeration system that utilizes available heat below the surface of the earth for distribution of heating and cooling or domestic hot water that has certain performance and efficiency ratings.

The Taxation and Revenue Department is charged with annual cost analysis and data reporting to relevant interim legislative committees. SB 40 is applicable in Tax Years beginning 2024.
 
Current Law:
 If SB 40 is not passed, qualifying systems must have been installed between 2010 and 2020. The credit is 30% of costs up to $9,000 and is not refundable but must be carried forward in succeeding tax years up to 10 years. Qualifying heat pumps are limited to reversible refrigerator devices that utilize ground water or water circulating through buried pipes as a condenser while cooling and as an evaporator while heating.