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Federal and Louisiana Taxes

Monthly Archives: September 2012

Sales Tax Software Questions Answered in Blog

Proposed Changes to State Income Tax Credits for Wind or Solar Energy Systems

Nicole Gould

The Louisiana Department of Revenue (LDR) has noticed its intent to revise the regulations affecting the state income tax credits for wind and solar energy systems (Wind/Solar Credits). The Wind/Solar Credits can be generally taken by the owner of a Louisiana residence or residential rental apartment for 50% of the first $25,000 for the purchase and installation costs of the wind or solar energy systems. The changes are not yet effective, but for those people in the planning stages of large projects, this could be critical information. The biggest change in the Wind/Solar Credit is to no longer qualify multiple systems per residence or residential apartment dwelling for the credit. The existing regulation permits the Wind/Solar Credits for each complete system upon a residence or apartment, and industry custom has used this to construct multiple complete systems in order to stack the credit for total construction costs in excess of $25,000. The proposed revision makes clear that only one wind or solar system will qualify for the credit. The other reductions to the credit include:

  1. The deletion of the ability to include uncapitalized finance costs as qualified system costs.
  2. Any replacement items added to an existing system cannot qualify for the credit. The credit will only apply to the purchase and installation of complete system.
  3. Tree trimming and removal costs are also being excluded from qualified system costs.
  4. Shared inverters are no longer a stated exception to having a complete system. Arguably, a system is incomplete and does not qualify if it shares an inverter with another system, a likely scenario with apartments.
  5. Solar energy systems will have additional construction and certification requirements before qualifying.

But where something is taken away, something is given. The credit currently permits “mounting systems” as part of eligible costs for the solar energy system credit. The regulation revision will specifically allow costs for a free-standing, ground-mounted solar energy system, which is a separate structure from the residence. The revision permits costs for the structure and its foundation that are necessary to mount the solar energy system to the specified height. The allowed structure costs do not include additional walls, interior finishes, foundations, roofing structures not directly related to the solar energy system, or any other any other addition not directly related to the solar energy system. If you’re thinking of gazebos, car/boat ports, and the like, then you see the added benefit to the revision. The LDR will hold a hearng on the proposed changes on September 27, 2012, and if there are no objections or changes, the revisions will eventually take effect.

UPDATE: These changes were promulgated at LAC 61.I.1907


Hurricane Isaac Tax Relief

Lance J. Kinchen

On September 5, 2012, following recent disaster declarations by the Federal Emergency Management Agency, the IRS announced that affected taxpayers in Louisiana and Mississippi will receive some tax relief.

Following Hurricane Isaac, the President declared the following parishes a federal disaster area:  Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington and West Feliciana.

As a result, the IRS has postponed certain deadlines for taxpayers who reside or have a business in the designated disaster area.  Under §7508A, the IRS has given affected taxpayers until January 11, 2013 to file most tax returns or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after August 26, 2012 and on or before January 11, 2013.  This includes the quarterly estimated tax payment due on September 17, 2012.  Furthermore, it includes corporations and businesses that previously obtained an extension until September 17, 2012 to file their 2011 returns and individuals and businesses that received a similar extension until October 15.

The IRS will abate any interest, late payment or late filing penalties that would otherwise apply.  In addition, the IRS is waiving failure-to-deposit penalties for federal employment and excise tax deposits normally due on or after August 26 and before September 10 if the deposits are made by September 10, 2012.

The Louisiana Department of Revenue (“LDR”) is granting similar state tax relief to affected taxpayers.  In addition to the parishes listed above, LDR has also granted state tax relief to East Baton Rouge, East Feliciana, Pointe Coupee, West Baton Rouge and West Feliciana.  LDR will waive any late filing penalties, late payments penalties and interest that would otherwise apply.  Any return or amount on which penalties or interest begin accruing before August 26, 2012 will not be eligible for this relief.

As a result, affected individuals and businesses will have until February 11, 2013 to file these state returns and pay any state taxes due.  This includes individuals and corporations that previously obtained an extension until November 15, 2012, to file their 2011 income tax returns.  It also includes the state estimated tax payment for the third quarter of 2012, due September 17, 2012.

Please consult your CPA or tax advisor on whether you qualify for such tax relief.

Louisiana Taxpayers Get Deadline Relief Due to Hurricane Isaac

Revenue Information Bulletin No. 12-029

September 12, 2012

Tax Relief to Individuals and Businesses Affected by Hurricane Isaac Return Filing and Tax Payment Deadlines Extended