U.S. Department of Energy - Energy Efficiency and Renewable Energy
EERE Financial Opportunities
Oregon and South Dakota Approve Renewable Energy Tax Incentives
March 19, 2008
Oregon and South Dakota are the latest states to encourage renewable
energy development in their state through tax incentives. Oregon
Governor Ted Kulongoski approved a bill on March 11 that allows tax
credits of up to $40 million for manufacturers of renewable energy
equipment. The bill is clearly aimed at drawing economically
beneficial facilities to the state, as it includes measures to reduce
the tax credit if the credit is unlikely to draw a new or expanded
business to the state, if the new facility is unlikely to provide a
significant number of new jobs, or if the facility or the company
building it appear unlikely to succeed. See the governor's
announcement of the bill signing (PDF 25 KB) and the full text
of the bill, House Bill 3619 (PDF 49 KB).
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While the Oregon act intends to encourage new manufacturing facilities
within the state, the new South Dakota act provides tax incentives for
wind energy facilities and the transmission lines that serve them.
House Bill 1320, approved by Governor Mike Rounds on March 14, waives
all state and local property taxes for wind energy facilities with a
capacity of at least 5 megawatts. Instead, the owners of the
facilities have to pay a tax of $3 per kilowatt of capacity plus 2% of
the gross receipts of the wind facility. The wind facility developers
can also earn rebates for up to half the cost of underground
distribution lines, substations, and transmission lines built to
support the wind power facility. The rebates can equal 90% of the
taxes paid for the first 5 years and 50% of the taxes paid for the
following 5 years. The remaining tax proceeds will be divided among
the state and the county and local governments where the wind facility
is located. See the governor's announcement of the bill signing and
the full text of the bill, House Bill 1320.