A wind-energy company that paid $1.6 million in property taxes for 2009 can claim credit for that amount to avoid paying over the next several years, the Nebraska Supreme Court said Friday as it upheld a tax credit for wind companies.
The high court reversed a Lancaster County judge who struck down the 2010 tax credit as unconstitutional.
The law was intended to reduce start-up costs for wind companies, while allowing local governments to collect the same amount of revenue over a longer period.
Wind facilities were previously taxed as personal property over a 5-year period. The 2010 law swapped the property tax for a nameplate capacity tax — a tax on the company's wind-generating power — to be imposed at a lower rate, but spread over at least 20 years.
As they crafted the law, lawmakers included a tax credit for a wind-energy farm in Knox County that had already paid property taxes. Without the credit, the court said, Elkhorn Ridge Wind would have been only wind-energy firm in Nebraska to have to pay both taxes.
"The nameplate capacity tax was clearly intended to be instead of, and not in addition to, the personal property tax on wind energy generation equipment," the court said in its ruling. "But without the credit, Elkhorn Ridge would be required to pay both personal property tax and the nameplate capacity tax on the same equipment."
The Knox County Board of Supervisors challenged the law after Elkhorn Ridge claimed credit for taxes paid after the county had set its budget. The firm reported a nameplate tax liability of nearly $285,000 in 2010, according to the ruling. But the company argued that it was allowed to apply the property taxes already paid to that tax debt.
The high court reversed a Lancaster County judge who struck down the 2010 tax credit as unconstitutional.
The law was intended to reduce start-up costs for wind companies, while allowing local governments to collect the same amount of revenue over a longer period.
Wind facilities were previously taxed as personal property over a 5-year period. The 2010 law swapped the property tax for a nameplate capacity tax — a tax on the company's wind-generating power — to be imposed at a lower rate, but spread over at least 20 years.
As they crafted the law, lawmakers included a tax credit for a wind-energy farm in Knox County that had already paid property taxes. Without the credit, the court said, Elkhorn Ridge Wind would have been only wind-energy firm in Nebraska to have to pay both taxes.
"The nameplate capacity tax was clearly intended to be instead of, and not in addition to, the personal property tax on wind energy generation equipment," the court said in its ruling. "But without the credit, Elkhorn Ridge would be required to pay both personal property tax and the nameplate capacity tax on the same equipment."
The Knox County Board of Supervisors challenged the law after Elkhorn Ridge claimed credit for taxes paid after the county had set its budget. The firm reported a nameplate tax liability of nearly $285,000 in 2010, according to the ruling. But the company argued that it was allowed to apply the property taxes already paid to that tax debt.