Energy Conservation Investments Deduction


Overview

Montana provides incentives to encourage the use of alternative energy and the conservation of energy.  The Energy Conservation Investments Deduction is available to businesses that pay the Montana Corporate Income Tax that make energy conservation capital investments in a Montana building.

 

Eligibility

 

Persons and firms primarily engaged in providing gas or electricity derived from fossil fuel extraction or conventional hydroelectric development are not eligible to claim the Energy Conservation Investments Deduction. Otherwise, a taxpayer may be able to deduct a portion of their expenditure for a capital investment in a building for an energy conservation purpose that is not financed by state, federal, or private grant funds for energy conservation.

 

 

Benefit

 

If eligible, and subject to Department approval, the taxpayer may deduct up to $1,800 or $3,600 from their corporate income tax in accordance with the following schedule:

 

Residential Buildings

Nonresidential Buildings

If the installation or investment is made in a residential building:

If the investment or installation is made in a building not used as a residence:

  • 100% of the first $1,000 expended:

$ 1,000
  • 100% of the first $2,000 expended:

$ 2,000

  • 50% of the next $1,000 expended:

500
  • 50% of the next $2,000 expended:

1,000

  • 20% of the next $1,000 expended:

200
  • 20% of the next $2,000 expended:

400

  • 10% of the next $1,000 expended:

100
  • 10% of the next $2,000 expended:

200

Maximum Deduction

$ 1,800

Maximum Deduction

$ 3,600

 

Related Laws

Montana Code Annotated (“MCA”)  15-32-101 through 15-32-106,

Administrative Rules of Montana (“ARM”)  42.23.421 through 42.23.423