(1) The credit against individual income and corporate income taxes provided in 15-32-402, MCA, is limited to 35 percent of the eligible costs for investments in depreciable commercial systems and net metering systems. Property placed in service for personal use does not qualify for this credit, but may qualify for the alternative energy system credit provided in 15-32-201, MCA, and ARM 42.4.104.

(2) The credit may not be claimed against taxes generally, but can only be applied against taxes due as a result of Montana taxable or net income produced by certain manufacturing plants, energy sales to new or expanded business facilities, or the alternative energy generating equipment itself. The determination of this income and associated tax is made on Form AEPC, Alternative Energy Production Credit. Examples of qualification for the credit are:

(a) Company A manufactures windmills in Montana. Company A invests in and installs windmills to supplement the electricity needs of its manufacturing plant. Company A can claim the credit to offset taxes on income from sale of the windmills.

(b) Company B invests in a windmill farm. Company C is a new manufacturing plant in Montana. Company B enters into a direct sales contract to sell electricity to Company C. Company B is eligible to claim the credit to offset taxes on income from the sale of electricity to Company C.

(c) Company D invests in a windmill farm. Company D sells the electricity generated by its windmill farm to the power grid. The credit is available for Company D to offset taxes on income from the sale of the electricity.

(3) The alternative energy production credit is not available to offset taxes on income from new or expanded business facilities. The following example describes nonqualification for the credit:

(a) Company E invests in a new business facility in Montana. Company E installs a windmill that is connected to a net metering system. The windmill provides energy for the new business facility. The credit is not available for Company E to offset taxes on income from the operations of the new business facility.

History: 15-30-2620, 15-31-501, 15-32-407, MCA; IMP, 15-32-402, 15-32-404, 15-32-406, MCA; NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from ARM 42.4.113, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2178, Eff. 9/19/14.