Tuesday, October 18, 2011

Tax Information from the State of Hawaii

The combination of new technology, and State and Federal tax credits has made the Photovoltaic Energy a confusing field for some people.    Some are confused even when there is no reason to be confused.   

We always recommend that customers and potential customers review their exact situation with their tax preparer for a few reasons:

1) The money involved is substantial
2) Your income and your tax situation in this year and upcoming near term years, for both Federal and State, could influence your deicsion making process in accordance with advice of your tax preparer.
3) Ultimately, the tax preparer may have to defend your tax return, so they do have the responsibility for due diligence. 

The State of Hawaii occasionally puts out some Tax Information Releases, the colored link below takes you to a PDF of Tax Release No 2007-02 from September 17, 2007.    I call this one the "12 page clarification".

TIR 2007-02

Below is an excerpt from this TIR, on page 3, that then goes on to define a "system".  

Further down, is some information on what justifies making a "system".  If you make lots of little systems JUST to capture tax credits, you could find some of your credits disallowed.   

Click on the image below for a larger view.

  In the link just below, is a clarifying Tax Information Release TIR 2010-03 to further define what is meant by a system.    


And then in the final paragraph Mr. Kawaguchi summarizes LEGITIMATE design reasons for making multiple systems.    Maybe you want a future electric car, maybe you suspect that your inlaws are going to move in, maybe you can't afford all the panels now--but you want the main infrastructure in place to support the future panels, maybe you want to keep the I(Squared)R wattage losses to a minimum maximizing the overall inverter efficiency.    Review with your tax person.

If you have insomnia, you can read all the TIRs right here!   LOL


And right nearby are what they call DOTAX annoucements, not sure what the difference is.    


One thing is clear though, we all need to spend more time producing products that are really needed by our society, and less time messing around with endless clarifications, misinterpretations, specialtiy interest group disinformation campaigns, and all that silliness that doesn't increase our standard of living by hard work and reward of efficient allocation of resources.  

Now that solar is "going mainstream" it seems like every old school control group of the past is trying to dip their fingers into the pot and extract benefit for themselves, AT THE DETRIMENT of those who really need the solar, the working citizens of Hawaii.