| Business Energy Tax Credit Pass-Through |
|
|
 |
|
|
The Business Energy Tax Credit Pass-through Option lets a project owner transfer a tax credit to a pass-through partner in return for a lump-sum cash payment upon completion of the project. The Pass-through Option now allows non-profit organizations, schools, governmental agencies, tribes, other public entities and businesses without tax liability to use the Business Energy Tax Credit by transferring their tax credit for an eligible project to a partner with a tax liability. Businesses with a tax liability may also choose to use the Pass-through Option. The same review, rules and standards apply to Business Energy Tax Credit projects approved under the Pass-through Option.
RATES
When the Pass-through Option is used, the pass-through partner pays the project owner a lump-sum payment calculated using the pass-through rate. The pass-through rate takes into account the value of the money over time and other factors. The Oregon Department of Energy reviews and sets the pass-through rate. The pass-through rate used is the rate in effect at the time the Oregon Department of Energy receives the Pass-through Agreement.
The pass-through payment is paid before the Final Tax Credit Certificate is issued to the pass-through partner.
| % Tax Credit |
1 Year Rate |
5 Year Rate |
| 35% |
30.5% |
25.5% |
| 50% |
43.5% |
33.5% |
For homebuilder installed renewable energy systems or high performance homes, the pass-through rate is 87% of the tax credit amount.
PASS-THROUGH PARTNER
Project owners are responsible for securing their own pass-through partner. The Oregon Department of Energy cannot guarantee pass-through partners for any project owners, but we may be able to assist you. If you would like assistance in finding a pass-through partner for your project, contact the Oregon Department of Energy at
passthru.program@state.or.us.
Project owners working with a building contractor, energy services company or equipment vendor may find that those businesses will agree to be pass-through partners. Non-profit organizations and public entities (such as schools) can approach large industrial or commercial companies in their communities or local business and service organizations to help identify a potential partner. Project owners can use multiple partners who divide the credit appropriately.
The Oregon Department of Energy recommends that project owners find their pass-through partners before beginning their project, although project owners may begin projects without an identified pass-through partner.
When a project owner identifies a pass-through partner, the Department of Energy strongly recommends that a project owner and a pass-through partner consult their tax and legal advisers.
TIMING
The project owner must complete the Application for Preliminary Certification and send the review charge to the Oregon Department of Energy BEFORE beginning the project. The Oregon Department of Energy will review the applications and may issue a Preliminary Certificate.
The Preliminary Certificate will include the estimated eligible project costs. A project owner without a designated pass-through partner can approach a potential pass-through partner with this information.
The Oregon Department of Energy must receive a completed Pass-through Project Application for Final Certification signed by the project owner and a pass-through partner before a Final Tax Credit Certificate may be issued for the project.
APPLICATION PROCESS
The project owner should take the following steps:
- Complete your Preliminary Certificate application and mail with your review charge to the Oregon Department of Energy before you begin your project. You do not need to have a pass-through partner identified.
- The Oregon Department of Energy will review and may issue a Preliminary Certificate for the project. The Oregon Department of Energy review may take four to six weeks to complete. You may begin your project before receiving your Preliminary Certificate, however, there is no guarantee of project approval if you do. Please note: you may also choose to wait to start your project when you find a pass-through partner. While the Oregon Department of Energy is available to assist you, the Department does not guarantee a partner for any project owner and can only assist project owners with completed projects. If your project depends upon finding a pass-through partner, we advise you to wait until you do identify your partner to begin your project.
- When your project is done, complete your portion of the Application for Final Certificate for Pass-through Projects. (If you have a pass-through partner identified, have them sign the application too. Mail to the Oregon Department of Energy and attach copies of your project receipts (for projects less than $50,000) or a CPA letter (for projects $50,000 or more).
- The Oregon Department of Energy will review your application for final certification and may send you a final certified amount letter.
- If you do not have a pass-through partner at this point, the Oregon Department of Energy will place your final application on “hold” status until a partner is secured. By having your portion of the paperwork finalized and on “hold,” the remaining steps can be completed in a timely manner when a pass-through partner is secured.
- When a pass-through partner is secured and the Application for Final Certification for Pass-through Projects is completed and signed, the Oregon Department of Energy may issue a pass-through payment letter verifying the final eligible costs, the pass-through amount and the tax credit amount to both the project owner and the pass-through partner.
- The pass-through partner will give the project owner the lump-sum cash payment indicated on the pass-through payment letter.
- The project owner will notify the Oregon Department of Energy as soon as the pass-through payment is received.
- The Oregon Department of Energy will issue a Tax Credit Certificate in the name of the pass-through partner.
- If a project owner decides (before a Final Tax Credit is issued) to withdraw a tax credit application within two years of the issue date of the Preliminary Certificate (even after the project is complete and the application is on “hold” status), the project owner may request in writing that the project be withdrawn and recover up to 75 percent of the initial application review fee.
|
Pass-through Partner Agreement Form
Pass-through partner availability as of 3rd Quarter 2008
What You Need to Know About Being a Pass-through Partner
Intermediary Partner Agreement
Applications for Preliminary Certification
General information on the Business Energy Tax Credit
Application for Final Certification for Pass-through Projects
PDF Word
Case Studies
University of Oregon Lundquist School of Business (pdf) (reprinted with permission from the Daily Journal of Commerce)
North Santiam School District
Bend, Oregon
Helping Your Community: Central Oregon Community College and Bank of the Cascades
Helping Your Community: St. Charles Medical Center and Brooks Resources
St. John the Baptist (pdf)
The Relief Nursery (pdf)
The Ecotrust (pdf)
Reprinted with permission from the Daily Journal of Commerce
Other Resources
Administrative Rules (pdf)
Energy Loan Program
Business Energy Tax Credit brochure (pdf)
Pass-through partners for schools (pdf)
|
|
|
|
|
