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In 2006, Maryland expanded the state’s clean energy income tax credit to include landfill gas energy projects.
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Maryland
Clean Energy Production Tax Credit
The Maryland Clean Energy Incentive Act of 2006 extended and expanded the state’s clean energy income tax credit. As part of this revision, the definition of "qualified energy resources" was expanded to include methane gas or other combustible gases resulting from the decomposition of organic materials from an agricultural operation, or from a landfill or wastewater treatment plant using anaerobic decomposition, thermal decomposition, or a combination of anaerobic and thermal decomposition.
To qualify, a facility must (1) be placed in service between January 1, 2006 and January 1, 2011, or (2) generate electricity from an eligible resource that is co-fired with coal and initially begins co-firing an eligible resource on or after January 1, 2006, but before January 1, 2011, regardless of when the original facility was placed in service.
An individual or corporation that applies for and receives certification from the Maryland Energy Administration may claim a credit equal to 0.85 cents per kilowatt-hour against the state income tax, for a five-year period, for electricity generated by eligible resources. The credit for electricity generated by co-firing is 0.5 cents per kilowatt-hour. The electricity generated must be sold to an unrelated person during the taxable year.
Certificates issued by the Maryland Energy Administration will state the maximum amount of credit over a five-year period and the earliest tax year for which the credit may be claimed. The maximum amount of credit is based on estimated annual energy production during a five-year period, or $2.5 million. The sum of all credits statewide may not exceed $25 million. If the credit in any taxable year exceeds a taxpayer's state income tax, the remainder of the credit may be carried forward and applied to succeeding taxable years until the credit is used or until the expiration of the tenth taxable year after the taxable year in which the credit began.
Applications for credit certificates will be approved on a first-come, first-served basis. Certificates will not be issued after December 31, 2010. If, over a three-year period, a taxpayer does not claim on average at least 10 percent of the maximum credit amount stated in the certificate, the Maryland Energy Administration may cancel part of the certificate.
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