Description and Applicable Taxes

A tax credit is available for eligible construction, renovation, or rehabilitation projects. The eligible projects must use Energy Star equipment and appliances, if applicable, and must have energy use that does not exceed:

• 70% of the energy use allowed by the state energy code for new construction eligible projects; or
• 80% of the energy used allowed by the state energy code for renovation or rehabilitation eligible projects.

The tax credit may be applied against the tax imposed under Chapter 208 of the Connecticut General Statutes.

Definitions
Allowable costs means amounts chargeable to a capital account that are paid for: 1) construction or rehabilitation costs; 2) commissioning costs; 3) architectural and engineering fees; 4) site costs (e.g. temporary electric wiring, scaffolding, demolition, fencing, security); 5) carpeting, partitions, walls, wall coverings, ceilings, lighting, plumbing, electric wiring, mechanical, heating, cooling, ventilation. Purchases of land, remediation costs, and the costs of telephone systems or computers are not allowable costs.

Eligible project means a real estate development project, or a building within a real estate development project, that is designed to meet the applicable LEED Green Building Rating System gold certificate or other equivalent certification, as determined by the Department of Energy and Environmental Protection (DEEP).

Tax Credit Amount

The tax credit is equal to the allowable costs multiplied by the applicable tax credit percentage. The tax credit percentage depends on the certification level of the project, as follows:

The tax credit percentage from the above table increases by 0.5% if the eligible project meets any one of the following requirements: 1) is a mixed-use development; 2) is located in a brownfield or enterprise zone; 3) does not require a sewer extension of more than 1/8 mile; or 4) is located within ¼ mile distance of bus transit, rail, light rail, streetcar, or ferry services.

Carryforward and Carryback Limitations

Excess tax credit may be carried forward for up to five income years. No carryback is allowed.

How to Apply
An applicant shall apply to DEEP for an initial tax credit voucher. DEEP may issue the tax credit voucher after it determines that the applicant is likely to complete an eligible project within a reasonable time. The tax credit voucher shall state the first income year for which the tax credit may be claimed, the maximum amount of tax credit allowable, and the expiration date by which the eligible project must be completed. DEEP may establish an application fee not to exceed $10,000.

Assignment and Transfer

A taxpayer allowed a green building tax credit may assign the tax credit to another taxpayer or taxpayers. A project owner, including a non-profit entity, may transfer a tax credit to a pass-through partner in return for a lump sum cash payment.

How to Claim the Tax Credit

For each income year that a taxpayer is claiming a tax credit, whether the taxpayer has earned the tax credit or been assigned the tax credit, the taxpayer shall complete Form CT-1120GB, Green Building Tax Credit, and attach the initial tax credit voucher issued by DEEP and a LEED certification document obtained from a LEED licensed architect or engineer. In addition, the taxpayer shall send copies of Form CT-1120GB, the initial tax credit voucher, and the LEED certification document to DEEP.

The initial tax credit voucher issued by DEEP will indicate the first income year that the tax credit may be claimed. A taxpayer may claim only 25% of the total amount of allowable costs in any year.

Where to Get Additional Information

Direct inquiries to:

Department of Energy and Environmental Protection

Bureau of Energy & Technology Policy

Ten Franklin Square

New Britain, CT 06051

860-827-2680

Statutory and Regulatory References

Conn. Gen. Stat. §12-217mm

Last updated July 1, 2016