Virginia House Bill HB849

Virginia 2022 Regular Session

• Introduced: 1/12/22
• Refer: 1/12/22

Caption

Income tax, state; establishes geothermal tax credit.

Impact

The implementation of HB 849 would have a significant impact on the state's energy landscape by incentivizing the adoption of geothermal technology. This shift is expected to benefit not only individual homeowners who install these systems but also local businesses that operate in the installation and maintenance of geothermal energy solutions. Furthermore, the tax credit is designed to foster economic development in areas historically reliant on tobacco production, diversifying the local economies through investment in sustainable energy.

Summary

House Bill 849 seeks to establish a tax credit for individuals who install geothermal systems in Virginia. This nonrefundable credit will apply to taxable years starting from January 1, 2023, to January 1, 2028. The credit can be up to $7,500 or 25% of qualified expenditures related to the geothermal system installation. The legislation aims to promote the use of renewable energy and enhance energy efficiency within the state, particularly encouraging installations in designated tobacco region localities.

Contention

Despite its favorable intentions, HB 849 has met some contention regarding its funding and eligibility criteria. There are concerns about the limitation of the tax credits to a total of $1 million per year, which may restrict the number of applicants who can receive the credit. Furthermore, opponents have raised issues regarding the stipulation that credits cannot be claimed if the geothermal system's cost was covered by public funds or reduced by federal tax credits. This could lead to confusion among eligible applicants and potentially hinder the bill's intended consequences.