Solar and Wind Energy Device Franchise Tax Deduction (Texas)
Last modified on December 17, 2014.
Financial Incentive Program
|Name||Solar and Wind Energy Device Franchise Tax Deduction|
|Incentive Type||Corporate Deduction|
|Applicable Sector||Commercial, Industrial|
|Eligible Technologies||Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind|
|Energy Category||Renewable Energy Incentive Programs|
|Amount||10% of amortized cost|
|Program Administrator||Comptroller of Public Accounts|
|Date added to DSIRE||2000-01-01|
|Last DSIRE Review||2014-08-06|
|References||DSIREDatabase of State Incentives for Renewables and Efficiency|
Texas allows a corporation to deduct the cost of a solar energy device from the franchise tax in one of two ways:
- the total cost of the system may be deducted from the company's taxable capital or,
- 10% of the system's cost may be deducted from the company's income.
Both taxable capital and a company's income are taxed under the franchise tax, which is Texas's equivalent to a corporate tax.
For the purposes of this deduction, a solar energy device means "a system or series of mechanisms designed primarily to provide heating or cooling or to produce electrical or mechanical power by collecting and transferring solar-generated energy. The term includes a mechanical or chemical device that has the ability to store solar-generated energy for use in heating or cooling or in the production of power." Under this definition wind energy is also included as an eligible technology.
Texas also offers a franchise tax exemption for manufacturers, seller, or installers of solar energy systems which also includes wind energy as an eligible technology.
|Contact Name||Comptroller of Public Accounts|
|Department||Comptroller of Public Accounts|
|Address||Post Office Box 13528, Capitol Station|
Authorities (Please contact the if there are any file problems.)
|Authority 1:||Texas Tax Code § 171.107|
|Date Enacted||1981 (subsequently amended)|
- Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.