A bewildering position taken by the N.C. Department of Revenue to retroactively disallow tax credits earned by hundreds of investors in renewable energy partnerships is threatening North Carolina’s favorable tax climate and the very notion of using sound tax policy to drive business investment in the state. These credits were originally promised to investors under the Renewable Energy Tax Credit program – a bipartisan initiative of the General Assembly that incentivized the development of renewable energy infrastructure and helped North Carolina build the second-most solar generation capacity in the nation – only to be thrown into question when DOR began auditing the majority of these investors after the program had expired in 2016.
Recently, the NC Chamber sent a letter to Governor Cooper, co-signed by numerous individuals, businesses, and non-profit organizations, explaining that DOR’s decision is damaging our reputation as an investor-friendly state and urging the Governor to direct the agency to issue corrective policy guidance that will allow the Renewable Energy Tax Credits to function as intended by state law. Our letter was picked up by several media outlets across the state, including the News & Observer, which ran a story that paints a detailed picture of the issue. You can view that story here.
Ray Starling, general counsel for the NC Chamber, was interviewed for the story. “We are now a first-in-class state for renewables, particularly for solar,” he explained to the News & Observer, “and now we don’t want to honor the rules that got us there. You have this weird scenario where we got exactly what the policymakers wanted and now we are retroactively saying ‘I don’t know if these investments should count anymore.’”
The NC Chamber believes this is an issue that extends far beyond the Renewable Energy Tax Credit program. The failure of the state to deliver on these credits has reportedly harmed investor confidence in other incentive programs, like the Historic Rehabilitation Tax Credit, which has injected roughly $1.3 billion of private investment into the state. Due to its far-reaching impacts on our business climate, this will remain a priority issue for the Chamber as we head into 2021. We thank the individuals and organizations who joined us in bringing much-needed attention to this problem and we look forward to working with them to encourage lawmakers to provide a solution that will restore investor confidence in North Carolina.