Tax Issues for Solar Energy Projects: Investment Tax Credit, Ownership Structuring, Federal and State Tax Challenges

Note: CPE credit is not offered on this program

Recording of a 90-minute premium CLE webinar with Q&A


Conducted on Tuesday, July 23, 2019

Recorded event now available

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Program Materials

This CLE webinar will guide energy counsel on key tax considerations and planning methods for solar energy facilities and developments. The panel will discuss both federal and state tax issues, claiming the investment tax credit (ITC), depreciation and offsetting taxable income, ownership structuring issues, and other tax planning considerations.

Description

Solar energy financing and development hinges on practical analysis of ownership structure and available tax planning techniques. Tax incentives create planning issues for developers and investors requiring energy counsel to address a variety of federal and state tax issues when advising clients.

Federal legislation incentivizes commercial and residential solar investment and development with the existing ITC. Maximizing the benefits of the ITC and other tax incentives is critical to solar energy transactions impacting an investor's desired return and exit along with amounts to be paid to developers. To reap these federal tax benefits, energy counsel must have in-depth knowledge of ITC requirements, the impact on tax basis, depreciation rules and fundamental ownership structures yielding the best tax benefits.

In addition to federal income tax issues, solar energy projects also raise state and local tax issues to consider. State tax incentives can be significant to the ownership structure, financing and development of a solar energy project. Each state's tax system is different, especially concerning available incentives for renewable energy. Counsel must consider issues and challenges relating to choice-of-entity, sales and use taxes, property taxes, and excise taxes imposed by a state.

Listen as our panel discusses the federal and state tax issues facing solar energy financing and development, deal structures, and other tax planning considerations.

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Outline

  1. Federal tax issues: investment tax credit, expense rules, tax basis, depreciation
  2. State and local tax issues: state income tax, sales and use taxes, property tax, incentives
  3. Ownership structuring challenges and pitfalls to avoid
  4. Effective tax planning methods for solar financing and development

Benefits

The panel will review these and other key issues:

  • Recent legislation and guidance on tax incentives for solar energy
  • Requirements for claiming the ITC and pitfalls to avoid
  • The amount of the ITC and beginning of construction challenges
  • Understanding the progress expenditure rules
  • MACRS and bonus depreciation rules
  • Ownership structuring issues and maximizing federal and state income tax benefits

Faculty

Grappone, Tony
Tony Grappone, CPA

Partner
Novogradac

Mr. Grappone specializes in providing accounting, tax and consulting services to developers, syndicators and investors...  |  Read More

Katz, Eli
Eli M. Katz

Partner
Latham & Watkins

Mr. Katz has extensive experience assisting clients on a wide range of complex transactions, including those in the...  |  Read More

Medina, Jorge
Jorge Medina

Partner
Pillsbury Winthrop Shaw Pittman

Mr. Medina’s practice focuses on tax aspects of energy investment and financing transactions, including tax...  |  Read More

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