Businesses with renewable-energy projects would be able to subtract less from taxes owed to the state, but manufacturers of plug-in electric cars would be eligible to use the tax break, under a bill passed Monday by the Oregon House.
The revisions of the business energy tax credit were contained in House Bill 2472, which moved to the Senate on a 40-19 vote. The revisions will save the state $8.9 million in the next two-year budget cycle, and $65 million to $70 million in the next six years.
The business energy tax credit was expanded in 2007 from 35 percent to 50 percent of qualifying project costs. But because businesses have used more credits and state coffers lost more taxes than originally projected, lawmakers scaled it back. The bill required a 60 percent majority because it raises revenue.
The bill’s major change prevents businesses from splitting up large projects and letting each of the smaller projects qualify for credits, which they can subtract directly from corporate income taxes they pay to the state.
“We have received great benefit as a state from this tax credit, but this is one area where we need to modify the program to make it more accountable,” said Rep. Phil Barnhart, D-Eugene, the chairman of the House Revenue Committee.
The bill also would eliminate a rule that allowed an automatic 10 percent cost override, providing an additional tax credit for the company.
“Many of the smaller projects have actually provided more jobs than the large projects in my district,” said Rep. Cliff Bentz of Ontario, the committee’s top Republican. “This bill tightens up some of the program requirements but still allows these companies to receive this essential state support.”
The bill expands the credit to include companies that produce electric cars or renewable energy batteries for electric cars.