GUIDE TO TECHNICAL
AND FINANCIAL ASSISTANCE
FOR AIR POLLUTION CONTROL
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air Programs
Stationary Source Pollution Control Programs
Research Triangle Park, North Carolina 27711
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APTD-1119
GUIDE TO TECHNICAL AND FINANCIAL
ASSISTANCE FOR AIR POLLUTION CONTROL
Simon K. Mencher and Daniel S. Jones
Gordian Associates Incorporated
299 Park Avenue
New York, New York 10017
EPA Contract No. 68-02-0331
Prepared for
ENVIRONMENTAL PROTECTION AGENCY
Office of Air Programs
Stationary Source Pollution Control Programs
Research triangle Park, North Carolina 27711
July 1972
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The APTD (Air Pollution Technical Data) series of reports
is issued by the Environmental Protection Agency to report
technical data of interest to a^limited number of readers.
Copies of APTD reports are. available free of charge to
Federal employees, current contractors and grantees, and
nonprofit organizations as supplies permit from the
Air Pollution Technical Information Center, Environmental
Protection Agency, Research Triangle Park, North Carolina
27711 or from the National Technical Information Service,
5285 Port Royal Road, Springfield, Virginia 22151.
This report was furnished to the Environmental Protection
Agency by Gordian Associates Incorporated, 299 Park Avenue,
New York, New York 10017, in fulfillment of EPA Contract
No. 68-02-0331. The contents of this report are reproduced
herein as received from Gordian Associates Incorporated.
The opinions, findings, and conclusions expressed are those of the
author and not necessarily those of the Environmental Protection
Agency.
Publication No. APTD-1119
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CONTENTS
Page No
INTRODUCTION 1
TECHNICAL ASSISTANCE 3
FINANCIAL ASSISTANCE 7
Direct
Commercial Bank Lease Financing
Commercial Bank Loans
State and Local Government Tax Exempt
Bond Programs
State Government Sponsored Tax Exempt
Bond Programs
Indirect
REFERENCES 13
Appendix A - Regional Air Pollution Control
Offices
Appendix B - Federal Tax Incentive
Appendix C - Catalog of State Financial
Assistance
GLOSSARY 138
1X1
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INTRODUCTION
The Clean Air Act, as amended by Congress in 1970,' '
is, to date, the most important Federal legal authority for
controlling air pollution. The Act lays the framework under
which the Federal government will work with state and local
governments to achieve acceptable air quality in the United
States. More specifically, the Act requires the Adminis-
trator of the Environmental Protection Agency to set ambient
air quality standards based on air quality criteria and
present control technology. The states must then develop
implementation plans which will achieve the ambient air
quality standards within specified periods of time. Accord-
ingly, each state has legislated its own specific abatement
requirements directed toward this end and, in some cases,
local governments have done the same.
While delegating the primary responsibility for pre-
venting and controlling air pollution to state and local
governments, the Act made the Federal government responsible
for providing them with the necessary technical and finan-
cial assistance.' ' This document has been produced to pro-
i
vide aid in this direction.
This document describes the Federal, state and other
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technical and financial assistance sources which business
and industry can use in complying with their abatement
obligations. Tax law provisions, sources of low cost fi-
nancing and special aid, eligibility requirements, applica-
tion procedures, review and appeal procedures, and sources
of technical aid and supplementary information are discussed
herein.
This document should not, and is not intended to, take
the place of a qualified tax counsel. The document is a
paraphrase or interpretation of the actual legal documents.
The reader should realize that tax laws undergo constant
revision and the tax incentives presented herein are
(or were) accurate only at the time of publication. The
reader, therefore, should verify the existence and nature
of the pertinent tax incentive before application is made.
The tax incentives discussed are specifically for
devices which control air pollution. It should be noted that
these devices may also qualify for other forms of financial
assistance.
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TECHNICAL ASSISTANCE
Technical assistance, of an advisory nature, is avail-
able from many diverse sources including the Federal, state
and local government agencies, professional and technical
associations, industrial associations and private and in-
dustrial corporations whose business it is to supply serv-
ices and/or equipment for air pollution control. A list of
some of these sources, the nature of the technical assist-
ance offered, and methods for obtaining such assistance
follows.
FEDERAL
The Clean Air Act authorizes the Federal government to
lend direct technical assistance^/ to state and local air
pollution control agencies and other appropriate public or
private groups or individuals in the conduct of research,
investigation, training control activities and others. This
enables the Office of Air Programs to offer technical advice
to companies having particularly difficult problems. Such
technical assistance may be requested through the local EPA
regional office listed in Appendix A.
In addition to direct assistance, the Federal govern-
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ment under the Clean Air Act has been authorized to conduct
research and publish "Control Techniques" documents^ ' dis-
cussing available technology which can be used to abate air
pollutant emissions—substances which the Federal government
has classified as air pollutants and on which it has pub-
lished air quality criteria. '-*) Those documents presently
available include particulates, sulfur oxides, carbon mon-
oxide, nitrogen oxides, hydrocarbons, and photochemical ox-
idants. Additionally, EPA has published general air pollu-
tion control engineering manuals, field enforcement manuals
and other technical materials related to the control of
emissions for specific industries.
STATE AND LOCAL GOVERNMENTS
The majority of stateand local air pollution control
agencies require that engineering plans for the construc-
tion of control devices be filed with the office prior to
installation and/or operation. Hence, such plans must
ultimately be reviewed by engineers at these local control
offices. The engineers are usually amenable to preliminary
discussions about the choice of method of control, its
effectiveness, and other technical details. Often, these
local offices will be able to offer their experience and
can suggest either professional engineers with whom to
consult, equipment manufacturers making devices which have
proven effective, or other government agencies which may
be helpful. Publications of upgrading requirements and
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technical or engineering guidelines are often available
from local offices.
PROFESSIONAL, TECHNICAL AND INDUSTRIAL ASSOCIATION
In most instances, local professional associations
(e.g. Society of Professional Engineers, Society of
Professional Architects, etc.) will advise an individual
on how to obtain assistance from members of their group.
Many technical associations (e.g. American Institute of
Chemical Engineers, American Society of Mechanical Engin-
eers, etc.) and industrial associations (e.g. American Paper
Institute, American Petroleum Institute, etc.) have ad hoc
or standing committees on air pollution control and have
literature or studies available which may be of assistance.
The addresses of local offices of such associations can be
found in the Yellow Pages. Main offices can be contacted
through the United Engineering Center, New York City.
CORPORATIONS
Many corporations, both service or consulting-oriented
and equipment or hardware-oriented, will offer preliminary
counsel on air pollution matters. Often catalogues de-
scribing basic equipment and methods of analysis or calcu-
lation are available from this source. Corporations are,
of course, available for complete technical assistance on
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a per diem, fixed price, or turnkey basis for air pollu-
tion control problems. Names may be obtained from pro-
fessional associations, the Yellow Pages, and other such
sources of information.
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FINANCIAL ASSISTANCE
INTRODUCTION
Financial assistance for the construction operation
and installation of air pollution control facilities takes
two forms: direct financial assistance, which generally
consists of a low-interest rate loan from either a public
or private source, and indirect financial assistance which
consists of a tax incentive for the installation of an
air pollution control facility.
DIRECT FINANCIAL ASSISTANCE
Presently, there are only two sources of direct
financial assistance available to a business for the in-
stallation of air pollution control facilities. This con-
dition should soon change, however, since many financial
institutions and governmental bodies are investigating the
need to provide this type of financial assistance.
The first source is limited to banks which provide
funds for a lease financing program or for low interest
rate loans. The other source includes the State and local
government programs which enable business to obtain funds
i
through tax-exempt bonds or through State-sponsored
low interest rate bank loans. Examples of direct finan-
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cial assistance include:
Commercial Bank - Lease Financing
Two banks, the Chase Manhattan in New York City and
the Pennsylvania Bank and Trust of Philadelphia, have
programs to lease the installation of air pollution control
equipment. Lease financing of air pollution control equip-
ment through banks is similar in many ways to the borrowing
of funds to finance the purchase of any capital asset. The
financial condition of the company largely dictates the
bank's decision to lease the equipment. Generally, a lease
rather than a loan is used in order to finance the equipment
over a period of time greater than the usual term of loans.
Commercial Bank - Low Interest Rate Loans
The Chemical Bank of New York and the First Pennsyl-
vania Bank and Trust of Philadelphia have programs to
finance the installation of air pollution control equipment
through low interest loans. For instance, in New York City
the Chemical Bank will lend a New York landlord 100% of the
cost of installing pollution control equipment in his build-
ing in any amount up to $15,000 per installation. The loan
can be used only for upgrading incinerators and oil burners,
or for installing equipment to compact garbage. All
equipment must meet the criteria established by the city's
Department of Air Resources, and other city agencies.
These loans are non-profit to the bank and the landlord has
up to seven (7) years to repay the loan in equal monthly
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installments. To determine whether similar loans are avail-
able elsewhere an interested party should contact its local
bank.
State And Local Government Tax Exempt Bond Program
Although Congress stopped the financing of industrial
development through tax exempt bonds as of 1969, it did
provide for the financing of air and water pollution control
facilities with bonds sold by local governments under the
Revenue and Expenditure Act of 1968. Since then, a growing
number of bonds have been sold for this purpose. Examples
include bonds sold by Missoula County in Montana for the
Hoerner Waldorf Corp. and by Chatham County in Georgia for
the Union Camp Corp. facility at Savannah. The advantage
of this type of financing is the lower interest cost to the
company.
When air pollution control equipment is financed by
this method, another advantage to the company is that the
accelerated depreciation Federal income tax deduction is
also available.
Generally the fixed costs of underwriting these bonds,
such as the underwriter's fees, make it impractical to issue
a bond issue smaller than $300,000 to $500,000.
The usual procedure under this method of financing
involves the issuing of tax exempt bonds by the governmental
unit. The funds from the bonds are then used to pay for
the air pollution control facility which is then leased to
the company owning the industrial plant. The company then
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makes lease payments to the governmental unit which in turn
uses these funds to pay the bond's interest and retires
them in due course. When the bond has been completely re-
tired, the title to the equipment is turned over to the
company by the governmental unit. The company may treat the
transaction as an installment sale thereby making the
accelerated tax deduction available.
State Government Sponsored Tax Exempt Bond Program
This source of financing is similar to the preceding
one except that the corporation rather than the state
actually pledges its credit behind the bond. An example of
this is found in Ohio.
The Ohio Air Quality Development Authority (OAQDA) has
the power to sell tax exempt revenue bonds for the financing
of air pollution control facilities that aid in reducing or
removing noxious emissions. The financing may cover both
new installations or additions to existing facilities. To
qualify for this program the facility must meet the Federal
emissions guidelines. In addition, the Ohio Department of
Health must approve the construction plans. -
The credit of the corporation backs these bonds, and
not the credit of the State of Ohio. Usually a lending
institution is used as a trustee to administer the bond
proceeds and its retirement program. The period of retire-
ment normally runs between 10 and 12 years with semi-annual
payments to the trustee's retirement account. The corpor-
ation has the use of the facility under a lease agreement
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with the OAQDA, but full ownership is transferred to the
corporation at the time of the bond's retirement. There are
several costs to the borrowing corporation in a bond sale
under this program. They include: trustee fees, legal fees,
underwriting fees, printing expenses, and the fee of the
Ohio Air Quality Development Authority.
INDIRECT FINANCIAL ASSISTANCE
Federal Assistance
On the Federal level, indirect financial assistance
for the construction or installation of air pollution con-
trol equipment consists solely of accelerated amortization.
Appendix B details the procedure for obtaining the accel-
erated amortization deduction, and includes eligibility re-
quirements, application procedures, review and appeal pro-
cedure and conditions for discontinuance of the deduction.
State Assistance
State assistance is presently composed of 4 types of
tax incentives: property tax exemptions, sales and use
tax exemptions, franchise or income tax credits (a specified
percentage of the total capital investment is deductible),
and franchise or income tax deductions (the entire capital
investment is deductible).
The franchise or income tax credit or deduction is
almost always an accelerated amortization deduction, with
the method of taking the deduction or credit varying accord-
ing to the laws of each state.
Table 1 of Appendix C is a tabulation of tax incentives
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specifically directed toward air pollution control for each
state. The remainder of Appendix C describes eligibility
requirements, application procedures, review and appeal
procedures, sources of supplementary information, and addi-
tional comments, if applicable.
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REFERENCES
1. Clean Air Act (42 U.S.C. 1857 et seg.) including the
Clean Air Act of 1963 (P.L. 88-206) and amendments
made by the "Motor Vehicle Air Pollution Control
Act" - P.L-. 89-272 (October 20, 1965), the "Clean
Air Act Amendments of 1966" - P.L. 89-675
(October 15, 1966), the "Air Quality Act of 1967" -
P.L. 90-148 (November 21, 1967), the "Clean Air
Amendments of 1970" - P.L. 91-604 (December 31, 1970)
See section 101 (a)(3).
2. Ibid, section 101 (a)(4).
3. Ibid, section 101 (a)(3).
4. Ibid, section 108, section 109.
5. Ibid, section 110.
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APPENDIX - A
REGIONAL AIR POLLUTION CONTROL OFFICES
Region I - Connecticut, Maine, Massachusetts, New Hampshire,
Rhode Island, Vermont
John A. S. McGlennon
Administrator, Region I
John F. Kennedy Federal Building
Boston, Massachusetts 02203
Telephone: 617-223-6883 or 223-6339
Region II - New Jersey, New York, Puerto Rico, Virgin Islands
Gerald M. Hansler
Administrator, Region II
Federal Office Building
26 Federal Plaza (Foley Square)
New York, New York 10007
Telephone: 212-264-2517
Region III - Delaware, District of Columbia, Maryland,
Pennsylvania, Virginia, West Virginia
Edward W. Furia, Jr.
Administrator, Region III
Curtis Building
6th and Walnut Streets
Philadelphia, Pennsylvania 19106
Telephone: 215-597-9800
Region IV - Alabama, Florida, Georgia, Mississippi, Kentucky,
North Carolina, South Carolina, Tennessee
Jack E. Ravan
Administrator, Region IV
1421 Peachtree Street, N.E.
Atlanta, Georgia 30309
Telephone: 404-526-3043
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Region V - Illinois, Indiana, Minnesota, Michigan, Ohio,
Wisconsin
Francis T. Mayo
Administrator, Region V
1 North Wacker Drive
Chicago, Illinois 60606
Telephone: 312-353-6942
Region VI - Arkansas, Louisiana, New Mexico, Oklahoma,
Texas
Bill V. McKarland
Administrator, Region VI
1600 Patterson Street, Suite 1100
Dallas, Texas 75201
Telephone: 214-749-1962
Region VII - Iowa, Kansas, Missouri, Nebraska
Jerome H. Svore
Administrator, Region VII
1735 Baltimore Avenue
Kansas City, Missouri 64108
Telephone: 816-374-3791
Region VIII - Colorado, Montana, North Dakota, South Dakota
Utah, Wyoming
John A. Green
Administrator, Region VIII
Suite 900
1860 Lincoln Street
Denver, Colorado 80203
Telephone: 303-837-4831
Region IX - Arizona, California, Hawaii, Nevada, Guam,
American Samoa
Paul DeFalco, Jr.
Administrator, Region IX ,
100 California Street
San Francisco, California 94111
Telephone: 415-556-2320
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Region X - Washington, Oregon, Idaho, Alaska
James L. Agee
Administrator, Region X
1200 Sixth Avenue
Seattle, Washington 98101
Telephone: 206-442-1220
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APPENDIX B
FEDERAL TAX INCENTIVE
Type of Tax Incentive
Income tax accelerated amortization deduction
Statute
Section 1.169-1 to section 1.169-4 and section 602 of
the Internal Revenue Code of 1954
Eligibility Requirement
The cost of a qualifying air pollution control facility
may be amortized over a 60 month period. To be eligible
for this deduction, the device must meet the following
requirements:
(1) it is used in connection with a plant or
other property in operation before January 1,
1969.
(2) it is used to abate or control atmospheric
pollution or contamination by removing, altering,
disposing of or storing pollutants, contaminants,
wastes or heat.
(3) if the facility is a building, it must be
I
devoted to pollution control.
(4) the construction, reconstruction or erection
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is completed, or, if purchased, placed in service
after December 31, 1968.
(5) it is placed in service before January 1,
1975.
(6) the appropriate state authority has certified
to the Environmental Protection Agency that the
facility has been constructed, reconstructed,
erected or acquired in conformity with the par-
ticular State program for such air pollution
control facilities.
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Application to Appropriate Certifying Agencies
Application for certification of the facility must be
made to the appropriate Regional EPA Administrator (see
Regional Offices, Appendix A). Applications must be signed
by the applicant and must contain the following information:
(1) name, address and Internal Revenue Service
identifying number of the applicant.
(2) type and narrative description of the
facility for which certification is or will be
sought, including a copy of schematic or engin-
eering drawings, and a description of the function
and operation of the facility.
(3) address, or proposed address, of facility
location.
(4) a general description of the specific pro-
cess or processes resulting in emissions which
are, or will be, controlled by the facility.
(5) if the facility is used, or will be used,
in connection with more than one plant or other
property, one of which was not in operation prior
to January 1, 1969, a description of the oper-
ations of the facility in respect to each plant
or other property, including a reasonable allo-
cation of the costs of the facility among the
plants being serviced, and a description of the
reasoning and accounting method used to arrive
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at such an allocation.
(6) description of the effect of the facility
in terms of type and quantity of pollutants,
contaminants, wastes or heat, removed, altered,
stored or disposed of by such a facility.
(7) if the facility performs functions in addi-
tion to qualifying functions, a description of
all functions and a reasonable identification of
the costs of the facility allocable to qualified
functions, including a description of the reason-
ing and the accounting of methods used to arrive
at such an allocation.
(8) date when construction, reconstruction,
erection or acquisition will be completed, or
when such facility was or will be acquired.
(9) date when the facility is or will be placed
in operation.
(10) identification of the applicable State and
local air pollution control regulations.
(11) expected useful life of the facility.
(The period of time it is expected to be used by
the taxpayer.)
(12) cost of construction, acquisition, installa-
tion, operation and maintenance of the facility.
(13) estimated profits reasonably expected to be
derived through the recovery of wastes over the
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useful life of the asset.
Application Procedure for Election of Deduction
The taxpayer elects to take this deduction by attach-
ing a statement to his return for the taxable year in which
the first month of the 60 month amortization period occurs.
In addition, the following information must be included:
(1) a description clearly identifying each certi
fied pollution control facility for which an amor-
tization is claimed.
(2) the date on which the control facility was
completed or acquired.
(3) the useful life of the facility determined
in accord with the applicable tax code provision,
and beginning as of the date the property is
placed in service.
(4) the date on which the amortization period is
to begin.
(5) the date the plant or other property to
which the facility is connected began operation.
(6) total costs and expenditures paid or in-
curred in the acquisition, construction, and in-
stallation of the facility.
(7) a description of any wastes which the
facility will recover during the course of its
operation, and a reasonable estimate of the
profits which will be realized by the sale of
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such wastes whether pollutants or not, over the
useful life of the facility. The estimate must
include a schedule setting forth a detailed com-
putation illustrating how the estimate was com-
puted including every item of estimated profit.
(8) a computation showing the amortizable basis
of the facility as of the first month for which
the deduction is elected.
(9) a statement that the facility has been cer-
tified by the Environmental Protection Agency
(EPA), a copy of the certification, and a copy of
the application which was filed with the EPA. If
the. EPA has not certified the facility, a state-
ment must be included that application has been
made to the state certifying authority and copies
of applications to the state certifying authority
and the EPA must be included.
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Review Procedure
The EPA Regional Administrator reviews the application
to determine whether the facility:
(1) has been certified by the appropriate state
certifying authority.
(2) removes, alters, disposes of, or scores pollu-
tants, contaminants, wastes or heat, which, but for
the facility, would be released into the environ-
ment.
(3) in its use, complies with all applicable
regulations of Federal agencies.
(4) furthers the general policies of the United
States and the states in the prevention and abate-
ment of pollution.
If the facility is found to comply, the Regional Ad-
ministrator will issue a notice of certification to the
Secretary of the Treasury.
Appeal Procedure
An applicant may appeal from a decision of the EPA
Regional Administrator by filing within 30 days with the
EPA Administrator a written1 statement of objections to the
decision. Within 60 days the EPA Administrator must return
a decision in writing.
Discontinuance of Election
A taxpayer may revoke or discontinue the election of
this deduction by a written statement to the IRS Adminis-
trator. The statement must specify the month in which the
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discontinuance is to begin, and must be filed before such
month. The statement must clearly identify the certified
pollution control facility and include a copy of the orig-
inal Federal certification.
Certification may be revoked by the Regional Administra-
tor on 30 days written notice to the applicant whenever the
Regional Administrator determines that the facility is no
longer being operated consistent with the requirements for
certification. Within the 30 day period, the applicant may
submit evidence to show why the certification should not be
revoked.
Notification of revocation will also be given to the
Secretary of the Treasury.
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taxpayer
Apply to appropriate
state certifying
authority
State review
of application
refusal
unsuccessful
appeal
Appeal if
^possible
certification
Apply for certification to
appropriate EPA regional
office (include copy of
state application, certifi-
cation, and other required
materials)
successful
appeal
Certification is-
sued to Secretary
of Treasury
unsuccessful
appeal
~^
EPA review of
application
certifi-
cation
refusal
File objections
with EPA
Adminis trator
successful
appeal
Certification issued
to taxpayer
Include certification,
etc., with income tax
return
normal
amortization
accelerated
amortization
Figure 1
Flow chart of procedure for
application for federal accelerated amortization
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APPENDIX C
CATALOG OF STATE FINANCIAL ASSISTANCE
State Government
The following pages contain information necessary for
a business concern wishing to determine what kind of finan-
cial assistance is available in the state in which the bus-
iness concern is located. All of the states are listed in
alphabetical order, and the data include the type of tax in-
centive, the procedure for application, the appeal procedure
which the taxpayer has open to him if the review procedure
has determined a disallowance, any applicable comments, and
finally, sources which the taxpayer can consult for further
information and/or application forms, unless they are
specifically listed as different under the specific proced-
ures for applications.
We suggest that anyone interested in pursuing this sub-
ject further investigate the specific sources of informa-
tion cited under each state. The information herein is our
interpretation of the legal and financial documents and may
be subject to recent change.
Those states not mentioned in this Appendix do not, at
this time, offer direct tax incentives. This situation
may change at any time, however, and it is suggested that
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the state taxing authority, as well as the state air pollu-
tion control agency be contacted.
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Table 1
MATRIX BY STATE OF AVAILABLE TAX INCENTIVES
SPECIFICALLY DIRECTED TOWARDS AIR POLLUTION CONTROL
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Property Tax
Exemption
X
X
X
X
X
X
X
X
X
X
Sales & Use Tax
Exemption
X
X
X
X
X
X
X
Franchise Tax
Deduction
X
X
Income Tax
Deduction
X
X
X
X
Gross Receipts
Exemption
X
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Table I (Continued)
MATRIX BY STATE OF AVAILABLE TAX INCENTIVES
SPECIFICALLY DIRECTED TOWARDS AIR POLLUTION CONTROL
Property Tax Sales & Use Tax Franchise Tax Income Tax Gross Receipts
Exemption Exemption Deduction Deduction Exemption
Missouri x
Montana x
Nebraska
Nevada
New Hampshire x
New Jersey x
New Mexico
New York x_ x
North Carolina x x x
North Dakota
Ohio x
Oklahoma
Oregon x x
Pennsylvania
Rhode Island x x x
South Carolina x
South Dakota
Tennessee x
Texas
Utah
Vermont x
Virginia x
Washington x
Wisconsin x x
Wyoming x
Note: x indicates that state has the particular tax exemption referred to.
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ALABAMA
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Code of Alabama, Title 51, Section 2.
ELIGIBILITY REQUIREMENT
All devices, identifiable parts of devices, systems or
facilities constructed, used or placed in operation primar-
ily for the protection of the public and its interest through
the control, reduction, or elimination of air pollution are
exempt from the property taxes. (Effective October 1, 1969).
APPLICATION PROCEDURE
Air pollution control property exemptions must be
listed with the county tax assessor and entered on the
property tax return in the same manner as any property for
which an exemption is sought.
REVIEW PROCEDURE
The review procedure for an air pollution control
property exemption is similar to that for any other property
tax exemption. The county tax assessor and the county tax
equalization board of the county in which the property is
located determine the amount of an exemption.
APPEAL PROCEDURE
Appeals on property tax exemptions and/or assessments
of air pollution, control property are treated in the same
manner as all property tax appeals. A taxpayer may object
to the board of equalization decision on a property tax
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exemption. If the board overrules the objection, an appeal
may be made directly to the circuit court of the county in
which the property is located. Finally, the taxpayer may
appeal the circuit court's decision to the supreme court of
Alabama.
COMMENTS
If an exemption claimed for air pollution control prop-
erty is disputed by the State of Alabama, the taxpayer
generally has the burden of proving the claim.
SOURCES OF INFORMATION
Department of Revenue Department of Health
State Capitol State Office Building
Montgomery, Alabama 36104 Montgomery, Alabama 36104
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ALABAMA
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Code of Alabama, Title 51, Sections 786 (34) (n) and
(789) (r)
ELIGIBILITY REQUIREMENT
Sales Taxes
The gross proceeds from the sale of all devices,
identifiable parts of devices, systems or facilities used
or operated (or intended for use or operation) in Alabama
primarily for the protection of the public and its interest
through the control, reduction, or elimination of air pollu-
tion are exempt from the sales tax. In addition, the gross
proceeds from the sale of all materials used (or intended
for use) in Alabama primarily for the protection of the
public and its interest through the control, reduction, or
elimination of air pollution are exempt from the sales
taxes. (Effective October 1, 1969).
Use Tax
The storage, use or other consumption in Alabama of
any devices, identifiable parts of devices, systems or
facilities constructed, used or placed in operation for the
protection of the public and the public interest through
the control, reduction or elimination of air pollution is
exempted from the use tax. (Effective October 1, 1969).
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APPLICATION PROCEDURE
Air pollution control facility or material sales and
use tax exemptions are claimed on the tax return in the same
manner as other exemptions from the sales and use taxes.
REVIEW PROCEDURE
The Department of Revenue reviews exemption claims for
air pollution control facilities and material sales and use
tax in the same manner as other exemptions to this tax. If
the Department should disagree with the claim, it will
notify the taxpaper of the disallowance or modification of
the exemption.
APPEAL PROCEDURE
To appeal the disallowance or modification of an ex-
emption from the sales and use tax for an air pollution con-
trol facility or material, the taxpayer lodges a protest at
a Department of Revenue hearing. If the hearing produces a
decision unsatisfactory to the taxpayer, he may appeal to
the Circuit Court and finally to the Alabama Supreme Court.
If an exemption is disputed by the Department of Revenue,
the burden of proof falls upon the taxpayer to show the
exemption is correct.
COMMENTS
Air pollution control facilities are any system, method,
construction device or accessory sold or used or intended for
the primary purpose of eliminating, preventing or reducing
air pollution, which, if uncontrolled, would be harmful,
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detrimental or offensive to the public and its interest.
Air pollution is the presence of air contaminants in
the atmosphere in a quantity and with characteristics,
location and duration which are injurious to the public and
its interest in the State of Alabama.
Air contaminants are dust, fumes, mist, smoke, other
particulate matter, vapor, gas, odorous substances, or any
combination thereof.
SOURCES OF INFORMATION
Department of Revenue Department of Health
State Capitol State Office Building
Montgomery, Alabama 36104 Montgomery, Alabama 36104
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ALABAMA
TYPE OF TAX INCENTIVE
Franchise tax deduction
STATUTE
Code of Alabama, Title 51, Section 25 and 348 D(l)(c)
ELIGIBILITY REQUIREMENT
Domestic Corporation
(A domestic corporation is defined as any company in-
corporated in the State of Alabama.) The book value of all
devices, identifiable devices, systems and facilities con-
structed, used or operated in Alabama primarily for the
protection of the public and its interest through the con-
trol, reduction or elimination of air pollution is deductible
from the value assigned to the capital stock of the corpor-
ation for the franchise tax assessment.
Foreign Corporation
(For franchise tax purposes, a foreign corporation is
a company incorporated outside Alabama but owning or leasing
property within the state.) The amount invested in all
devices, identifiable parts of devices, systems and facil-
ities used or placed in operation in Alabama primarily for
the protection of the public through the control, reduction
or elimination of air or water pollution is deductible from
the amount of capital employed in Alabama for franchise tax
assessment purposes.
APPLICATION PROCEDURE
This deduction is claimed by completing the designated
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space on the franchise tax return. An itemized list of air
pollution control devices must be attached to the return.
REVIEW PROCEDURE
i •
The Department of Revenue will review the tax return
claim for the deduction to ensure the air pollution control
devices are properly described and identifiable and that
they are, in fact, for air pollution control.
APPEAL PROCEDURE
A taxpayer may appeal the disallowance or modification
of this deduction by the Department of Revenue at a Depart-
ment hearing. Appeals from the decision at the hearing are
taken to the Circuit Court. Appeals from the decision of
the Circuit Court are taken to the Alabama Supreme Court.
SOURCES OF INFORMATION
Department of Revenue Department of Health
State Capitol State Office Building
Montgomery, Alabama 36104 Montgomery, Alabama 36104
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ALABAMA
TYPE OF TAX INCENTIVE
Income tax deduction
STATUTE
Code of Alabama (Title 51, Section 402 (12))
ELIGIBILITY REQUIREMENT
All investments during the tax year in devices, parts
of devices, systems or facilities operated, or to be oper-
ated in Alabama, primarily for the protection of the public
and its interest through the control, reduction or elimina-
tion of air pollution are deductible from the net income of
corporations. Rather than deducting these amounts in the
tax year of the investment, there is an option to elect to
amortize them over a period not exceeding the useful life
of the pollution control device, system or facility and to
deduct from income each year of that useful life the appli-
cable amount of the amortization of the investment. (Effec-
tive retroactively to December 31, 1968) If a deduction is
taken under this section, it shall be in lieu of an allow-
ance for depreciation or obsolescence otherwise allowable.
APPLICATION PROCEDURE
Deductions for air pollution control investments are
entered on the corporation income tax return (Form 20) in
the same manner as other deductions from income.
REVIEW PROCEDURE
The Department of Revenue reviews a deduction claim
for a pollution control investment in the same manner as it
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does other deductions claims. If it disagrees with the
deduction, the Department will inform the taxpayer and ex-
plain its reasons for disallowing or modifying the allow-
ance .
APPEAL PROCEDURE
To appeal the disallowance or modification of a deduc-
tion for an air pollution investment, the taxpayer may lodge
a protest at a Department of Revenue hearing. Appeals from
the Department of Revenue are made to the Circuit Court and
from the Circuit Court to the Alabama Supreme Court. If a
deduction is disputed by the Department of Revenue, the
taxpayer has the burden of proof to show the deduction to
be correct.
SOURCES OF INFORMATION
Department of Revenue Department of Health
State Capitol State Office Building
Montgomery, Alabama 36104 Montgomery, Alabama 36104
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ARIZONA
TYPE OF TAX INCENTIVE
Income Tax - Rapid Amortization
STATUTE
Arizona Revised Statutes, Title 43, Section 43-123.02
ELIGIBILITY REQUIREMENT
A taxpayer may elect a deduction for amortization of
the adjusted basis of any device, machinery or equipment
for collecting atmospheric pollutants and contaminants at
the source. The amortization must be based on a period of
60 months, and begins with the month in which the property
was completed or acquired.
Only that portion of the cost of the property which is
properly attributable to the construction, reconstruction,
remodeling, installation or acquisition of an air pollution
control facility, as certified by the State Department of
Health, may be included in the adjusted basis of the proper-
ty for the purpose of computing the amortization deduction.
Land and buildings are not to be included in the basis.
This amortization deduction will not be allowed for air
pollution control facilities until the property has been
certified by the Arizona State Department of Health, and in
order to be eligible for certification, the property must
have been acquired after December 31, 1967.
The deduction provided in this section of the law must
be in lieu of any allowance for exhaustion, wear and tear
of the property.
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APPLICATION PROCEDURE
To apply for certification of an air pollution control
facility, the taxpayer must complete the prescribed appli-
i
cation form. These forms are available from the Air Pollu-
tion Control Division of the Arizona State Department of
Health. The application with plans and invoices of the
facility must be filed within six months of the acquisition
of an air pollution control facility. However, if the
facility is being constructed, the application may be filed
from six months preceding to six months following completion
of construction. If the facility is certified, the taxpayer
must attach the approval notice of certification onto his
tax return for the first tax year in which the amortization
deduction is claimed.
REVIEW PROCEDURE
The Air Pollution Control Division of the Department
of Health will review the application and attachments to
determine if the facility is in fact for air pollution con-
trol as defined by the Arizona statutes. The taxpayer is
informed of the decision by a form letter, which is then
attached to the income tax return if the review was favor-
able.
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APPEAL PROCEDURE
The decision of the Air Pollution Control Division may
be appealed to the State Court system.
SOURCES OF INFORMATION
Income Tax Division Division of Air Pollution
State Tax Commission of Arizona Control
Phoenix, Arizona 85007 4019 N. 33rd Ave.
Phoenix, Arizona 85017
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ARKANSAS
TYPE OF TAX INCENTIVE
Gross Receipts Exemption
i
STATUTE
Arkansas Statutes, Chapter 19, Section 84-1904
ELIGIBILITY REQUIREMENT
The gross receipts or proceeds from the sale of mach-
inery and equipment required by State law to be installed
and utilized by manufacturing and processing facilities to
prevent or reduce air pollution and contamination are exempt
from the gross receipts tax. The plant or facility must be
located in Arkansas.
APPLICATION PROCEDURE
Exemptions for air pollution control equipment are
claimed on the gross receipts tax return in the same manner
as other exemptions from the tax.
REVIEW PROCEDURE
This exemption is reviewed by the Commissioner of
Revenues as part of his review of the gross receipts tax
return. If the Commissioner disagrees with the exemption,
an assessment is made to cover the deficiency in the tax
liability resulting from the disallowance or modification
of the exemption.
APPEAL PROCEDURE
If an assessment is made to cover a tax liability
deficiency resulting from the disallowance or modification
of an exemption, the taxpayer may demand a hearing before
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the Commissioner within 20 days of his receipt of the
assessment notice. Appeals from the Commissioner's deci-
sions are taken to the state courts.
SOURCES OF INFORMATION
Sales & Use Tax Section Arkansas Pollution Control
Department of Finance and Commission
Administration 1100 Harrington Ave.
Little Rock, Arkansas 72201 Little Rock, Arkansas 72202
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CALIFORNIA
TYPE OF TAX INCENTIVE
Corporate income tax deduction--rapid amortization
STATUTE
California Bank and Corporation Tax Law,
Sections 24372, 24372.5 (1958) Regulation 24372
ELIGIBILITY REQUIREMENT
A taxpayer may elect to take a deduction for the
amortization of the adjusted basis (for determining gain)
of device, machinery, or equipment (but not land and build-
ings) for the collection at the source, of atmospheric
pollutants and contaminants. The amortization may be taken
all in the year of construction (or acquisition) or in the
year the certification is received, or it may be spread
over a period of 60 months. The 60 month period shall be-
gin either with the month following the month in which the
device, machinery or equipment was completed or acquired or
with the succeeding income year.
The adjusted basis of.the air pollution control device
is that amount which is properly attributable to the con-
struction, reconstruction, remodeling, installation or
acquisition of such device, machinery or equipment as
certified by the California Department of Public Health
(effective December 31, 1954). The amount of the deduction
is calculated by dividing the adjusted basis by the 60
month period and multiplying the quotient by the number of
months in which the deduction is eligible during the taxable
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year. This deduction must be in lieu of the deduction for
exhaustion; wear and tear, and obsolescence of machinery,
devices or equipment.
APPLICATION PROCEDURE
To elect either the one year or 60 month amortization
deduction, an appropriate statement must be included in the
taxpayer's return for the income year in which the device,
machinery or facility was completed or acquired, or in which
the certification was made, whichever is later.
To apply for certification, the taxpaper must apply to
the California State Department of Public Health. If the
Department finds the equipment meets the requirements of the
law, it will certify the application and return it. The
certified application is attached to the tax return for the
first income year in which the deduction is claimed. (Use
form FT-84, Application for Deduction for Amortization of
Air Pollution Control Devices).
Applications for certification of acquired pollution
control devices must be filed within six months of the
acquisition. If the device has been constructed, however,
i
the application must be filed within six months after com-
pletion. No method of electing this amortization deduction
other than that prescribed in this statute is permitted.
REVIEW PROCEDURE
Upon receipt of the application, the Occupational
Health Division of the State Board of Health reviews the
information to ensure that the device is for controlling
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air pollution at its source.
APPEAL PROCEDURE
The decision of the Occupational Health Division may
be appealed to the state courts.
SOURCES OF INFORMATION
Franchise Tax Board Air Resources Board
1025 P Street California Department of
Sacramento, California 95814 Public Health
1025 P Street
Sacramento, California 95814
State Board of Equalization
1020 N Street
Sacramento, California
(Appeals from findings of
deficiencies by the Franchise
Tax Board are made to this office.)
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CONNECTICUT
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Connecticut General Statutes, Chapter 203,
Section 12-81 (52) (1958)
ELIGIBILITY REQUIREMENT
Structures and equipment acquired after July 1, 1967
for the primary purpose of reducing, controlling or elim-
inating air pollution are exempt from the property tax if
that purpose of the facility is certified as approved by the
Clean Air Commission. The structures or equipment are exempt
from the property tax if that purpose of the facility is
certified as approved by the Department of Environmental
Protection. The exemption applies to both owned or leased
facilities. The Department of Environmental Protection may
certify a portion of the structures and equipment acquired
to the extent that such a portion has as its primary pur-
pose the reduction, control or elimination of air pollution.
APPLICATION PROCEDURE
This tax credit may be claimed by completing and sub-
mitting an application to the Department of Environmental
Protection requesting approval of the air pollution control
facility. Applications are available from the Department.
REVIEW PROCEDURE
The Department of Environmental Protection reviews
applications for this credit and generally visits the facility
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to determine whether it meets the requirements for approval.
Upon approval, the Department will mail copies of its
certification of approval to the applicant and the tax auth-
ority in the town in which the facility is located. The
exemption is then entered on town property tax records. A
partial approval may be granted if the Department finds
only part of the facility has as its primary purpose air
pollution control.
APPEAL PROCEDURE
There is no specific appeal procedure from a Department
of Environmental Protection finding on an application for
approval of an air pollution control facility. The appeal
procedure is through the state courts in the same manner as
appeals to all others by the Department.
SOURCES OF INFORMATION
State Tax Commissioner Air Pollution Control Section
State Capitol Department of Environmental
Hartford, Connecticut 06115 Protection
79 Elm Street
Hartford, Connecticut 06115
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CONNECTICUT
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Connecticut General Statutes, Chapter 219,
Section 12-412 (1958)
ELIGIBILITY REQUIREMENT
The sales, storage, use or other consumption of tangi-
ble personal property or supplies for or used in the oper-
ation of air facilities are exempt. The Department of
Environmental Protection will certify the portion of the
property or supplies which has as its primary purpose the
reduction, control or elimination of air pollution.
APPLICATION PROCEDURE
This tax credit may be claimed by completing and sub-
mitting an application to the Department of Environmental
Protection. Application forms are available from the
Department.
REVIEW PROCEDURE
The Department of Environmental Protection will review
i
applications for this credit to determine if it meets the
requirements for approval. As part of the review process,
the Department will generally inspect the facility. If
approval is warranted, the Department will mail copies of
its certification of approval to the applicant and the Tax
Commissioner. A partial approval may be granted if the
Department finds air pollution control to be the primary
purpose of only part of the facility.
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APPEAL PROCEDURE
There is no specific appeal procedure from a Department
of Environmental Protection finding on an application for
approval of an air pollution control facility. However,
there is an appeal procedure available through the state
courts. This procedure is the same as appeals from all
orders by the Department of Environmental Protection.
SOURCES OF INFORMATION
State Tax Commission Air Pollution Control Section
State Capitol Department of Environmental
Hartford, Connecticut 06115 Protection
79 Elm Street
Hartford, Connecticut 06115
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CONNECTICUT
TYPE OF TAX INCENTIVE
Franchise (Income) tax credit
STATUTE
Connecticut General Statutes, Chapter 208,
Section 12-217 (1958)
ELIGIBILITY REQUIREMENTS
A credit against the Franchise Tax will be allowed in
any income year for five percent of the expenditures paid
or incurred during that income year for the construction,
rebuilding, acquisition or expansion, including the planning,
of air pollution abatement facilities . The Department of
Environmental Protection must approve the facility. Facility
construction, rebuilding, acquisition or expansion must have
begun after January 1, 1967. If the amount of the credit
provided by the expenditures for the air pollution abate-
ment facility exceeds the amount of precredit tax, the bal-
ance of credit remaining may be taken in any of nine suc-
cessive years.
APPLICATION PROCEDURE
This tax credit may be claimed by completing and sub-
mitting an application to the Department of Environmental
Protection. Application forms are available from the
Department.
REVIEW PROCEDURE
The Department of Environmental Protection will review
applications for this credit to determine whether it meets
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the requirements for approval. If approval is warranted,
the Department will mail copies of its certification of
approval to the applicant and the Tax Commissioner. A par-
tial approval may be granted if the Department finds air
pollution control to be the primary purpose of only a part
of the facility.
APPEAL PROCEDURE
There is no specific appeal procedure from a Depart-
ment of Environmental Protection finding on an application
for approval of an air pollution control facility. However,
there is an appeal procedure available through the state
courts.
SOURCES OF INFORMATION
State Tax Commission Air Pollution Control Section
State Capitol Department of Environmental
Hartford, Connecticut 06115 Protection
79 Elm Street
Hartford, Connecticut 06115
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GEORGIA
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Georgia Code, Chapter 92-2, Section 92-201.1 (f)
ELIGIBILITY REQUIREMENT
All property used in a facility or part of a facility
which has been installed or constructed for the primary
purpose of eliminating or reducing air pollution is exempt
from property taxes. The exemption is dependent upon the
i
facilities having been certified by the State Department of
Health Air Quality Control Branch, as necessary and adequate
for the purposes intended. There is no effective date for
the. installation or construction of the air pollution con-
trol facility.
APPLICATION PROCEDURE
This exemption for an air pollution control facility
may be claimed by filing an "Application for a Certificate
of Exemption" with either the Revenue Department or the
Air Quality Control Branch of the State Department of
Health. Application forms are available from the Revenue
Department.
REVIEW PROCEDURE
The Air Quality Control Branch of the State Department
of Health will inspect the facility for which an applica-
tion has been received from the taxpayer or Department of
Revenue. The inspection will be made only after the facili-
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ty has been installed and is in use. The Air Quality
Control Branch will recommend to the Revenue Department cer-
tification if the inspection determines the facility to be,
in fact, installed and in use as an air pollution control
facility.
APPEAL PROCEDURE
There is no specific appeal procedure for determination
by the Air Quality Control Branch and the Revenue Department
for Air Pollution Control facility certifications. However,
the appeal procedure used for all tax exemptions is avail-
able, namely appeal directly to the state courts.
SOURCES OF INFORMATION
Property Tax and Intangibles Tax Air Quality Control Branch
Unit Georgia Department of
State Revenue Commissioner Public Health
Atlanta, Georgia 30334 116 Mitchell St., S.W.
Atlanta, Georgia 30303
52
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GEORGIA
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Georgia Code, Act 173, Section 92-21 50.3
ELIGIBILITY REQUIREMENT
The sale of machinery or equipment which is incorpora-
ted into a real estate facility used primarily for the pur-
pose of reducing or eliminating air pollution is exempt
from sales taxes. However, the person making the sale must
collect the tax, unless the purchaser furnishes him with a
Certificate of Exemption (Form ST-M8) issued by the Com-
missioner of the State Revenue Department certifying that
the purchaser is entitled to purchase the machinery or
equipment without paying the tax. For the Commissioner to
issue the certificate, the Air Quality Control Branch,
Georgia Department of Public Health must certify to the
primary purpose of the machinery being for the elimination
of air pollution, and that the machinery is necessary and
adequate for its intended purpose.
This statute is only applicable to machinery and equip-
ment purchased after April 1, 1967-
APPLICATION PROCEDURE
The purchaser of machinery and/or equipment to be in-
stalled in air pollution control facilities may secure the
benefit of this statute by filing an Application for
Certificate of Exemption (Form ST-M7) with the State Revenue
53
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Department. The purchaser should furnish such other infor-
mation as the Commissioner may deem necessary in determin-
ing the adequacy of such machinery and/or equipment. Upon
approval of the application and certification by the Air
Quality Control Branch, the Commissioner will issue the
Certificate of Exemption (Form ST-M8) for presentation by
the purchaser to his supplier.
In the event the issuance of the Certificate of
Exemption has been delayed pending certification by the Air
Quality Control Branch or for other reasons, the purchaser
must pay the tax to his supplier and promptly file a claim
for Refund (Form ST-12A). Upon receipt of the Claim, Waiver
and Certification, refund of tax will be given directly to
the purchaser. The purchaser must maintain records of
machinery purchased and a Certificate of Exemption
(Form ST-M8). In the event that property other than the
approved items were purchased under this exemption, the
purchaser will be liable for the tax, interest and penal-
ties.
REVIEW PROCEDURE
As discussed above, an application for Certificate of
Exemption is forwarded to the Air Quality Control Branch by
the State Revenue Department. If the Air Quality Control
Branch certifies to the necessity and adequacy of the
machinery and/or equipment for the purposes intended, the
Revenue Department will issue the Certificate of Exemption.
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APPEAL PROCEDURE
There is no specific appeal procedure for determination
by the Air Quality Control Branch and the Revenue Department
for air pollution control facility certifications. However,
the appeal procedure used for all tax exemptions is avail-
able, namely appeal directly to the state courts.
SOURCES OF INFORMATION
Sales and Use Tax Unit Air Quality Control Branch
State Revenue Commissioner Georgia Department of Public
Atlanta, Georgia 30334 Health
116 Mitchell St., S.W.
Atlanta, Georgia 30303
55
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HAWAII
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Hawaii Revised Statutes, Section 246-34.5 (1968)
ELIGIBILITY REQUIREMENT
An exemption from property taxes may be claimed for
property used or to be used as an air pollution control
facility. This exemption is effective for the taxable
years beginning July 1, 1971.
APPLICATION PROCEDURE
A claim for an air pollution control facility exemption
must be filed with the Department of Taxation by June 30 of
the preceding tax year for which the exemption is claimed.
REVIEW PROCEDURE
The Tax Assessor of the tax district in which the air
pollution control facility is located will assess the facil-
ity and consider the exemption claimed for the facility.
APPEAL PROCEDURE
If the taxpayer's claim for the exemption is disallowed
or reduced by the Tax Assessor, he may appeal to the Board
of Review of the tax district in which the air pollution
control facility is located, or, as an alternative, he may
i
appeal to the Tax Appeal Court, but in either case, the/
appeal must be initiated on or before September 25 of the
tax year.
56
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SOURCES OF INFORMATION
Property Technical Office Air Sanitation Branch
Department of Taxation Division of Environmental Health
Honolulu, Hawaii 96813 P. 0. Box 3378
Honolulu, Hawaii 96801
57
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IDAHO
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Idaho Code, Chapter 1, Section 63-105 T (1047)
ELIGIBILITY REQUIREMENT
Facilities, installations, machinery or equipment de-
signed, installed and used in eliminating, controlling or
preventing air pollution are exempt from the property tax.
If the air pollution control property also serves other
beneficial purposes and uses, the portion of the assessed
valuation determined to be necessary for and devoted to
eliminating or preventing air pollution will be exempted.
APPLICATION PROCEDURE
Air pollution control property is not required to be
listed or assessed by the tax assessor.
REVIEW PROCEDURE
The County Tax Assessor is responsible for assessing all
property in his county and transmits the county tax roll
to the County Board of Commissioners, which meets as a
county board of equalization to«adjust the property assess-
ment. The Board may allow, disallow or modify any claimed
exemptions. The Board must give the taxpayer notice and
opportunity to be heard before disallowing or modifying
his exemption.
APPEAL PROCEDURE
The Board of Equalization will hear appeals of the
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assessments by its County Assessor. An appeal of a deci-
sion of a Board of Equalization may be made by the taxpayer
within 30 days after the mailing of notice of the decision.
Their decision may be appealed to the District Court and
the decision of the District Court may be appealed to the
State Supreme Court.
SOURCES OF INFORMATION
Property and Inheritance Tax Air Pollution Control Section
State Tax Commission Environmental Improvement
Boise, Idaho 83701 Division
Idaho Department of Health
Statehouse
Boise, Idaho 83703
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ILLINOIS
TYPE OF TAX INCENTIVE
Property tax basis for assessment
STATUTE
Revenue Act of 1939, Sections 21a - 1 through 21a - 8
ELIGIBILITY REQUIREMENT
For the purposes of the property tax, pollution con-
trol facilities are valued in relation to the fair cash
value of their economic productivity to their owners.
Pollution control facilities are defined as any system,
method, construction, device or appliance designed, con-
structed, installed or operated for the primary purpose of
eliminating, preventing or reducing air pollution. Pollu-
tion control facilities include any building or equipment,
or portion thereof, designed, constructed, installed or
operated with the primary purpose of treating, pretreating,
modifying or disposing of any potential gaseous pollutant,
which if released might be harmful, detrimental or offen-
sive to human, plant or animal life, or to property. This
definition applies to pollution control facilities de-
signed, constructed, or installed prior to and after the
effective date of this statute, August 14, 1967-
APPLICATION PROCEDURE
Pollution control facilities must be certified by the
Pollution Control Board to qualify for property tax exemp-
tions. The application for a pollution control facility
certificate is filed with the Pollution Control Board as
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prescribed by the regulations issued by the Board. The
application must contain appropriate and available descrip-
tive information concerning anything claimed to be entitled
in whole or in part to an exemption. The exemption is
claimed on the taxpayer's return and the certificate is
attached to the return.
REVIEW PROCEDURE
The Board will review the application and determine
whether the facility or a portion of the facility is in com-
pliance with the definition of such a facility. If the
Board enters a finding for the claimed exemption it will is-
sue a certificate to that effect. The certificate requires
tax treatment as a pollution control facility, but only for
the portion certified if there is not complete certifica-
tion. The effective date for the certificate shall be the
date of the application or the date of the construction of
the facility, whichever is later.
APPEAL PROCEDURE
Before denying a certificate, the Pollution Control
Board will give reasonable notice in writing to the appli-
cant and will grant him a reasonable opportunity for a fair
hearing. If an application for a certificate has been
denied, modified, restricted, or revalued (if previously
issued), the applicant may appeal from the Pollution Control
Board's findings by bringing an action before the Board for
an administrative review.
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COMMENTS
The Pollution Control Board may on its own initiative
revoke or modify a certificate under any of the following
circumstances:
the certificate was obtained by fraud or
misrepresentation.
the holder of the certificate has failed substan-
tially to proceed with construction, reconstruc-
tion, installation, or acquisition of pollution
control facilities.
the pollution control facility to which the cer-
tificate applies has ceased to be used for the
primary purpose of pollution control and is being
used for a different purpose.
If the Board takes action to revoke or modify a cer-
tificate, it will promptly notify the taxpayer and furnish
him with a copy of the Board's findings. The taxpayer may
also use the appeal procedures described above.
SOURCES OF INFORMATION
Commissioner of Taxation
Department of Revenue
Springfield, Illinois 62607
Pollution Control Board
Illinois Environmental
Institute
189 W. Madison Street
Chicago, Illinois 60602
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ILLINOIS
TYPE OF TAX INCENTIVE
Sales tax exemption
Service Use tax exemption
Use tax exemption
Service Occupation tax exemption
STATUTE
S.B. 959, Laws 1967, Section la (Retailer's Occupation
Tax)
S.B. 961, Laws 1969, Section 2a (Service Use Tax)
S.B. 960, Laws 1969, Section 2a (Use Tax)
S.B. 962, Laws 1969, Section 2a (Service Occupation Tax)
ELIGIBILITY REQUIREMENT
The purchase, employment and transfer of air pollution
control facilities is not considered a purchase, use or sale
of tangible personal property and is thereby exempt from
Sales tax exemption, Service Use tax exemption, Use tax
exemption and Service Occupation tax exemption benefit.
An air pollution control facility is defined as any
system, method, construction device or appliance sold, used,
or intended for the primary purpose of eliminating, prevent-
ing, or reducing air pollution. The air pollution control
facility may also have as its primary purpose the treating,
pretreating, modifying, or disposing of any potential
gaseous pollutant which, if released without such treatment,
pretreatment, modification, or disposal might be harmful or
offensive to human, plant, or animal life, or to property.
This exemption includes the purchase of air pollution
control facilities by contractors who sell the facilities
to their customers as part of a contract to furnish and in-
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stall air pollution control facilities. Replacement parts
for the facility are also included in the exemption, but
chemicals or fuel used in the equipment are not exempted.
Any tangible personal property used with a facility but not
a physical component part of the equipment is not exempt.
Commercial or industrial incinerators may qualify for
the exemption, but the taxpayer must obtain a ruling for
each installation from the Rules and Regulations Division
of the Department of Revenue.
A gas-fired boiler used to produce steam or heat when
replacing a coal-fired boiler which was considered a source
of air pollution is not exempt. This is because the primary
purpose of the boiler is not to reduce air pollution, but to
produce steam or heat. Mufflers, exhaust pipes and air fil-
ters on motor vehicles are not exempt, because their primary
purpose is also not air pollution control. A chimney or
smokestack usually does not qualify for an exemption. How-
ever, if to control air pollution a chimney is built higher
than normal, the portion of the chimney above the normal
construction may qualify for an exemption.
Exemptions are granted for materials purchased for and
used in the construction of a structure built solely for
the purpose of housing air pollution control facilities.
APPLICATION PROCEDURE
If a purchaser or his contractor-installer buys an item
whose intended use is as an air pollution control facility,
he should certify to the seller its use as an air pollution
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control facility or its use in such a facility in order to
relieve the seller of the duty of collecting the tax for
the Department of Revenue.
REVIEW PROCEDURE
As soon as practicable after the seller's tax return
is filed, the Department of Revenue will examine it and make
any decisions to disallow or modify exemptions for air pollu-
tion control facilities. The Department uses the general
guidelines set forth in the Eligibility section above. When
necessary, the Department will consult with the State Air
i
Pollution Control Board before making a decision. If the
Department disallows or modifies an exemption, it will send
the seller a notice of the amount of tax due.
APPEAL PROCEDURE
A taxpayer has 20 days after the issuance of a notice
of tax liability (as discussed above) to file a protest
and request a hearing to appeal the Department's disallow-
ance or modification of an exemption. As an alternative,
the taxpayer may elect to pay the tax under protest and
within 30 days file for an injunction (see 89-320). If the
taxpayer requests a hearing, he will receive a revised
final assessment after the hearing from the Department.
A Circuit Court of the County has the power to review
all final assessments of the Department of Revenue. An
appeal to a Circuit Court must be initiated within 35 days
from the notice of the Department's final assessment. It
is necessary for the taxpayer to pay the amount of the tax
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under a declaration of protest to provide for an effective
court determination of liability.
COMMENTS
The purchaser of an air pollution facility will be
held liable for the tax by the Department if it is found
that he does not use the facility for air pollution control.
SOURCES OF INFORMATION
Commissioner of Taxation Pollution Control Board
Department of Revenue Illinois Environmental Institute
Springfield, Illinois 62607 189 W. Madison Street
Chicago, 111. 60602
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INDIANA
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Laws 1965, Chapter 119, Section 1 and 2
ELIGIBILITY REQUIREMENT
A property tax exemption may be claimed for any tangi-
ble personal property that constitutes a stationary indus-
trial air purification system. The system must be a part
of a privately owned manufacturing or industrial plant. In
addition, it must be employed exclusively for air purifica-
tion and not used in the production of property for sale.
The industrial air purification system must be designed and
used for the improvement of public health and welfare by
eliminating air contamination caused by industrial wastes
and contaminants for which no public sanitary treatment or
elimination service is available. The amount of the exemp-
tion claimed is limited to the cost of the depreciable per-
sonal property that is attributable to the air purification
system.
APPLICATION PROCEDURE '
This exemption is claimed upon the owner's annual per-
sonal property tax return which is filed with the assessor
of the township in which the property is located.
REVIEW PROCEDURE
The assessor of the township in which the property is
located will review the exemption claim and will allow
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or deny it in whole or in part as he views the claim under
the provisions of this law. The action of the assessor on
the claim is subject to review by the County Board of Re-
view and the State Board of Tax Commissioners.
APPEAL PROCEDURE
The taxpayer may appeal the assessor's action on the
claim for exemption by filing a complaint with the County
Board of Review. After a hearing and a decision by the
County Board and if the taxpayer is still dissatisfied with
the treatment of his claim, he may appeal to the State Board
of Tax Commissioners. Finally, the taxpayer has the right
to appeal the final determination of the State Board to the
Circuit or Superior Court of the County in which the proper-
ty is located.
SOURCES OF INFORMATION
Commissioner of Taxation Air Pollution Control Board
Department of Revenue 1330 W. Michigan St.
Indianapolis, Indiana 46204 Indianapolis, Ind. 46206
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MAINE
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Maine Revised Statutes Annotated, Title 36, Section
1760,30
ELIGIBILITY REQUIREMENT
Sales, storage or use taxes are not collected on air
pollution control facilities certified as such by the
Environmental Improvement Commission. An air pollution
control facility is defined as any appliance, equipment,
machinery, installation or structure installed, acquired or
placed in operation primarily for the purpose of reducing,
controlling, eliminating, or disposing of industrial air
pollutants. Air conditioners, dust collectors, fans and
similar facilities designed, constructed or installed solely
for the benefit of the person for whom installed or the per-
sonnel of such person do not qualify as air pollution con-
trol facilities and are not exempt from sales, storage and
use taxes.
APPLICATION PROCEDURE
An application must be filed with the Environmental
Improvement Commission in order to claim this exemption.
The form, entitled Application for Sales and Use Tax is
available from the Environmental Improvement Commission.
Instructions accompany the application.
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REVIEW PROCEDURE
The Environmental Improvement Commission reviews the
application to ensure the device is, in fact, for air pollu-
tion control.
APPEAL PROCEDURE
The taxpayer may appeal the decision of the Environ-
mental Improvement Commission directly to the State courts.
SOURCES OF INFORMATION
Bureau of Taxation Environmental Improvement Commission
Sales Tax Division State House
State House Augusta, Maine 04330
Augusta, Maine 04330
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MARYLAND
TYPE OF TAX INCENTIVE
Sales and Use tax rate reduction
STATUTE
Maryland Annotated Code, Article 81 Section 342(s),
Article 81 Section 325(g). Article 81 Section 372(r),
Article 81 Section 373(g).
ELIGIBILITY REQUIREMENT
Air pollution control devices which might normally be
considered as part of real estate and which are required in
order to conform to air pollution laws or regulations are
taxed at a reduced rate for the Sales and Use tax. Thus,
on each sale or use, the device is taxed at two cents, if
the price is from 51 cents to one dollar, and at an addi-
tional cent for each 50 cent increment above one dollar.
APPLICATION PROCEDURE
The buyer informs the supplier that he is going to be
using the device for air pollution control. If it later
appears there was a misrepresentation involved, the un-
collected taxes will be solicited.
REVIEW PROCEDURE
The Retail Sales Tax Division will examine all the
facts, but will not normally inspect the facility, unless
it deems it necessary.
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REVIEW PROCEDURE
The Retail Sales Tax Division will examine all the
facts, but will not normally inspect the facility, unless
it deems it necessary.
APPEAL PROCEDURE
The assessment may first be appealed by calling for a
formal hearing; second, to the Tax Court; and finally,
through the State Courts
SOURCES OF INFORMATION
Department of Taxation
State Office Building
301 W. Preston Street
Baltimore, Maryland 21201
Bureau of Air Quality Control
Maryland State Department
of Health & Mental Hygiene
610 N. Howard Street
Baltimore, Maryland 21201
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MASSACHUSETTS
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
General Laws of Massachusetts, Chapter 59, Section 5,
Clause 39
ELIGIBILITY REQUIREMENT
Any equipment, device or facility installed on or
attached to real property is exempt from property taxes if
its purpose is the abatement or prevention of air pollution
within the Commonwealth.
APPLICATION PROCEDURE
This exemption may be claimed by a written request to
the Board of Assessors in the town or city in which the
property is located.
REVIEW PROCEDURE
There are no statewide review procedures. The town
in which the property is located is responsible for the
review.
APPEAL PROCEDURE
The assessor's valuation of the pollution control
t
property may be appealed to the Board of County Commission-
ers or to the Appellate Tax Board. If the taxpayer is
dissatisfied with the Board of County Commissioners' or
the Appellate Tax Board's decision to modify or disallow
the claim for exemption, an appeal may be taken to the
Supreme Judicial Court.
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SOURCES OF INFORMATION
Commissioner of Taxation Bureau of Air Use Management
Department of Corporation Department of Public Health
and Taxation 600 Washington Street
Boston, Massachusetts 02202 Boston, Mass. 02111
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MICHIGAN
TYPE OF TAX INCENTIVE
Property tax exemption
Sales and use tax exemption
STATUTE
Compiled laws, Chapter 336, Sections 336.1 through
336.8
ELIGIBILITY REQUIREMENT
Air pollution control facilities are exempt from real
and personal property taxes. An air pollution control
facility is defined as .machinery, equipment or structures
which are installed or acquired for the primary purpose of
controlling or disposing of air pollution. The air pollu-
tion, if not controlled, must be harmful or inimical to
the public for the facility to qualify for the exemption.
The definition does not include air conditioners, dust
collectors, fans, or other similar facilities installed for
the benefit of personnel of a business or for private use.
In order to qualify for the exemption, the taxpayer
must receive a tax exemption certificate from the State Tax
Commission which must receive,approval from the Director
of Health for the facility as being designed and operated
primarily for the control, capture, and removal of pollu-
tants from the air. The Director of Public Health must
also find the facility suitable, reasonably adequate, and
meeting the interest and purposes of the law. (Effective
1965)
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APPLICATION PROCEDURE
To claim this exemption the taxpayer must file an
application for a pollution control tax exemption certifi-
cate with the State Tax Commission. The application, which
is available from the Commission, must include plans, spec-
ifications and a descriptive list of all materials and
equipment to be incorporated in the facility. In addition,
the proposed operating procedure for the control facility
must be submitted with the application. A tax exemption
granted under this statute will be reduced to the extent of
any commercial or productive value derived from any mater-
ials captured or recovered by an air pollution control
facility.
REVIEW PROCEDURE
Upon receipt of an application for a pollution control
tax exemption certificate, the State Tax Commissioner shall
request the Director of Public Health's approval of the air
pollution control facility. The Commissioner shall also
notify the Department of Revenue and the tax assessor of the
taxing unit in which the facility is located (or to be
located). In addition, the Commissioner shall give both
the applicant and the tax assessor an opportunity for a
hearing.
When the Director of Public Health approves or dis-
approves the facility, he will notify the State Tax
Commissioner; who will in turn, issue a certificate or
notice of refusal of certification to the applicant. Copies
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of the certificate or notice of disapproval will be mailed
to the tax assessor and to the Department of Revenue. Cer-
tificates will state the total application cost of the fa-
cility entitled to exemption.
APPEAL PROCEDURE
If a taxpayer is dissatisfied by the modification or
disallowance of an exemption claim or the revocation or
modification of an existing air pollution control tax ex-
emption certificate, he may appeal from the State Tax Com-
mission's finding through an administrative review by the
Commission within 20 days of the notice of the filing.
COMMENTS
The exemption certificate may be modified or revoked
by the State Tax Commission by its own initiative or on a
complaint by the Director of Public Health, the Department
of Revenue, or by the Assessor of the taxing unit in which
the facility is located. The revocation or modification
of the certificate is possible when any of the following
take place:
- the certificate was obtained by fraud or
misrepresentation.
- the holder of the certificate has substan-
tially failed to proceed with the construction,
reconstruction, installation or acquisition of
the facility.
- the holder of the certificate has failed sub-
stantially to operate the facility for the pur-
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pose and to the degree of control specified
in the certificate.
- the primary purpose of the facility is no longer
pollution control.
- substantial noncompliance with Act 348 of the
Public Acts of 1965 as amended or any rule pro-
mulgated thereunder.
SOURCES OF INFORMATION
Revenue Division Michigan Air Pollution
Department of Treasury Control Commission
Lansing, Michigan 48920 3500 N. Logan St.
Lansing, Michigan 48906
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MINNESOTA
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Minnesota Statutes, Section 272.02 (15)
ELIGIBILITY REQUIREMENT
All real and personal property used primarily for air
pollution abatement and control is exempt from property
taxes. To claim this exemption, the taxpayer and the air
pollution control facility must satisfy the following con-
ditions and qualifications:
- this exemption only covers the facility to the
extent that it is used for the abatement and
control of air pollution.
- the air pollution control facility must meet the
standards, regulations or criteria prescribed
by the Minnesota Pollution Control Agency.
- the facility must be installed or operated in
accordance with a permit or order issued by the
Minnesota Pollution Control Agency.
- the facility will' continue to be exempt as long
as the permit issued by the Minnesota Pollution
Control Agency remains in effect.
APPLICATION PROCEDURE
To request an exemption of all or a portion of any equip-
ment or device operated primarily for the control or abate-
ment of air pollution, an application must be filed with the
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Commissioner of Taxation.
REVIEW PROCEDURE
The Commissioner of Taxation may request the Minnesota
Pollution Control Agency to furnish information or advice
concerning the application. If the Commissioner determines
that the facility qualifies for an exemption, he will issue
an order exempting the air pollution control facility from
property taxes.
APPEAL PROCEDURE
Appeals from decisions by the Commissioner of Taxation
are taken to the Tax Court and appeals from the Tax Court's
decisions are taken to the State Supreme Court.
SOURCES OF INFORMATION
Property Tax Division Minnesota Pollution Control
Department of Taxation Agency
St.Paul, Minnesota 55101 Division of Air Quality
717 Delaware Street, S.E.
Minneapolis, Minn. 55440
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MINNESOTA
TYPE OF TAX INCENTIVE
Income tax credit
STATUTE
Minnesota Statutes, Section 290.06
ELIGIBILITY REQUIREMENT
There is available an income tax credit of five percent
(5%) of the cost of the equipment installed and operated to
prevent air pollution. The following conditions and quali-
fications must be met to qualify for the credit:
- the air pollution control equipment must be
operated within Minnesota for the sole purpose
of preventing air pollution.
- the equipment and its operation must be in
accordance with the engineering principles
approved by the Minnesota Pollution Control
Agency.
- the credit may only be deducted from the tax
due in the first year for which a depreciation
deduction is allowed for the equipment.
- this credit may not exceed $50,000 in a year.
If the credit exceeds this limitation, the excess may
be treated as follows:
- a credit carryback to each of the three taxable
years preceding the year of excess credit, and
- a credit carryover to each of the seven taxable
years following the year of excess credit.
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The entire amount of the unused credit from the year
of excess credit must be carried to the earliest year in
the 10 year carryback-carryforward period discussed above
and then to each of the nine following years in chronological
sequence. The maximum credit allowable in any one of these
10 years must not exceed $50,000. This credit applies only
to air pollution control equipment acquired in taxable years
beginning on or after January 1, 1961.
APPLICATION PROCEDURE
This credit may be claimed by filing an application with
the Minnesota Pollution Control Agency for certification of
the air pollution control equipment. Application forms are
available wherever there are state tax return forms. The
certification, .when received, must be attached to the state
income tax return. The Schedule for Pollution Control
Equipment (schedule PC) must also be completed and attached
to the return.
REVIEW PROCEDURE
Upon receipt of the application, the Pollution Control
Agency will inspect the equipment and review the applica-
tion to determine if the equipment is in fact for air pollu-
tion control. The equipment must also have a valid installa-
tion and operating permit to receive the certification.
APPEAL PROCEDURE
The decisions of the Pollution Control Agency may be
appealed through an administrative review to the agency.
Appeals from the decisions are taken to the state courts.
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SOURCES OF INFORMATION
Income Tax Division Minnesota Pollution Control Agency
Department of Taxation Division of Air Quality
St. Paul, Minn. 55101 717 Delaware Street, S.E.
Minneapolis, Minn. 55440
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MISSOURI
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Revised Statutes of Missouri, Section 144,030 (13) and
(14)
ELIGIBILITY REQUIREMENT
Machinery, equipment, appliances and devices purchased
or leased and used solely to prevent or abate air pollution
are exempt from sales and use taxes. The air pollution con-
trol facility must be certified as such by the Executive
Secretary of the Air Conservation Commission.
APPLICATION PROCEDURE
The taxpayer, prior to submitting informal application
for certification, calls the Air Conservation Commission and
describes the facility he wishes exempted. Then, if he
desires, he should submit three copies of MACC Form No. 9 to
the Commission. Upon certification, the air pollution con-
trol facility exemption may be approved either by sending
invoices for the cost of the facility to the Department of
Revenue after installation and then deducting the entire
amount when filing the income tax return, or in lieu of
paying the sales or use tax, estimates for the facility's
cost may be made before installation and presented to
the vendor with a copy of the certification letter from
the Air Conservation Commission.
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REVIEW PROCEDURE
The Air Conservation Commission will determine whether
the facility is actually for air pollution control. There
are two form letters sent upon approval: one to the tax-
payer and the other to the Department of Revenue.
APPEAL PROCEDURE
Any action taken by the Executive Secretary of the Air
Commission in connection with this sales and use tax ex-
emption may be appealed to the Air Conservation Commission.
The Commission may uphold or reverse the Executive Secretary's
action.
SOURCES OF INFORMATION
Division of Collection Missouri Air Conservation
Department of Revenue Commission
Jefferson City, Missouri 65101 P. 0. Box 1002
112 W. High Street
Jefferson City, Mo. 65101
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MONTANA
TYPE OF TAX INCENTIVE
Property tax reduced assessment rate
STATUTE
Revised Codes of Montana, Section 69-39 23
ELIGIBILITY REQUIREMENT
Facilities, machinery or equipment utilized to reduce,
eliminate, control or prevent air pollution are classified as
Class Seven (7) property for the purposes of property taxes.
Class Seven property is taxed at 77o of its true and full.
value.
APPLICATION PROCEDURE
An application must be filed with the Environmental
Control Section of the State Department of Health for an air
pollution control facility to be classified as Class Seven
property. Application forms are available from the Environ-
mental Control Section.
REVIEW PROCEDURE
Upon receipt of an application, the Environmental Con-
trol Section will review the data to determine whether the
facility meets the state's pollution control standards. If
these are met, a certificate will be issued and notification
will be made to the State Board of Equalization. The Board
will then designate the property as Class Seven and notify
the County Assessor in the county in which the air pollution
control facility is located.
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APPEAL PROCEDURE
Appeals from the decisions of the Environmental Control
Section of the State Board of Health are made directly to
the state courts. Appeals from the decisions of the Board
of Equalization are made to the Board of Equalization
itself.
SOURCES OF INFORMATION
State Board of Equalization Environmental Control Section
Department of Revenue of State Board of Health
Helena, Montana 59601 Montana State Department
of Health
Cogswell Building
Helena, Montana 59601
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NEW HAMPSHIRE
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTL
Revised Statutes, Amended, Chapter 72, Section 72:12-a
and b
ELIGIBILITY REQUIREMENT
Any firm, person, or corporation which builds, con-
structs, installs, or places in use in New Hampshire a
treatment facility, device, appliance, or installation
wholly or partly for the purpose of reducing, controlling
or eliminating any source of air pollution is entitled to a
property tax exemption for the facility and any real estate
necessary for the facility. If the facility is not solely
used for pollution control, the Air Pollution Control Com-
mission will determine the exemption according to the per-
centage of the investment in the facility that can be pro-
perly allocated to pollution control. The exemption period
begins the April first following the receipt of the Com-
mission's determination.
APPLICATION PROCEDURE
To claim this exemption, the taxpayer must file an
application with the Air Pollution Control Commission with
a copy to the taxing authorities in the municipalities where
the facilities are located. The application must describe
the facilities and their function(s), and the total invest-
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ment with the portion allocable to each function, if there
is more than one function.
REVIEW PROCEDURE
The Air Pollution Control Commission will investigate
the application and determine whether the purpose of the
facility is solely or only partially for air pollution con-
trol. If the Commission finds the purpose only partially
for air pollution control, it will determine by an alloca-
tion of the applicant's investment in the facility what per-
centage of the facility is used to control air pollution.
In making its investigation, the Commission may inspect the
facility and request such other information it deems reason-
ably necessary to make its determination. The Commission
will notify the applicant and the municipal taxing author-
ities of its determination. The taxing authorities will
then reduce the assessment of the facility by the percentage
of the facility to be used for pollution control.
APPEAL PROCEDURE
The owner of the air pollution control facility may
request a rehearing or appeal the determination of the Air
Pollution Control Commission. Further appeal may be made
to the state courts.
SOURCES OF INFORMATION
Commissioner of Taxation Air Pollution Control
State Tax Commission Commission
Concord, New Hampshire 03301 61 South Spring
Concord, New Hampshire 03301
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NEW JEKSEY
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
New Jersey Revised Statutes, Section 54; 4-3.56
ELIGIBILITY REQUIREMENT
Equipment, facilities, or devices constructed or in- •
stalled and used primarily for the purpose of abating or
preventing pollution of the atmosphere and which have been
certified to be an air pollution abatement facility by the
Department of Environmental Protection are eligible for ex-
emption. The certification exempts the device from taxation
beginning the tax year following the year in which the cer-
tificate was issued.
APPLICATION PROCEDURE
Application for certification should be made to the
Department of Environmental Protection which will certify
the device if it is found that the device is designed pri-
marily for the control or abatement of air pollution and is
suitable and reasonably adequate for such purpose. Appli-
cations are available in the offices of the Department.
REVIEW PROCEDURE
The Department of Environmental Protection, upon re-
ceipt of an application, will assure itself that the facility
is, in fact, an air pollution control facility. A physical
inspection of the facility may be made if necessary. If the
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Department certifies the facility, it will send its certi-
fication papers to the Division of Taxation of the State
Department of Treasury. The Division will in turn notify
the County Board of Taxation of the county in which the
facility is located. Upon receipt of the certification,
the County Board will enter the exemption on the taxpayer's
property records.
APPEAL PROCEDURE
A taxpayer may request an administrative appeal to the
Department of Environmental Protection from its decision, on
the taxpayer's application. If the decision is negative,
it may be appealed to the state courts.
COMMENTS
The certificate may be revoked if, after notice of an
opportunity for a hearing has been given to the certificate
holder, the State Commissioner of Health finds:
- the certificate was obtained by fraud or mis-
representation .
- substantial failure to proceed with construction
or acquisition of the device has taken place.
- the device has ceased to be used primarily for
pollution control.
- that the design or construction of the device
has changed so substantially that the primary
purpose, suitability or adequacy has changed
from being primarily for pollution abatement.
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- the performance of the device is not suitable
and reasonably adequate.
SOURCES OF INFORMATION
Local Property Tax Bureau Department of Environmental
Division of Taxation Protection
Department of the Treasury P. 0. Box 1390
Trenton, New Jersey 08625 Trenton, New Jersey 08625
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NEW YORK
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
New York Consolidated Laws Chapter 50-a, Article 4,
Section 481
ELIGIBILITY REQUIREMENT
This Statute enables a county, city, town or village
to exempt from property and special ad valorem taxes the
amount by which the value of the property is increased by
the construction or reconstruction of a facility, built in
order to comply with the state law, which removes, reduces,
or renders less noxious the contaminants from air contamina-
tion sources.
APPLICATION PROCEDURE
Application for this exemption must be made to the
Commissioner of Environmental Conservation on Form 108.
The application form is available from the offices of the
Department. The original should be filed with the local
assessor where the facility is located and a copy should be
filed with the Commissioner.1
REVIEW PROCEDURE
There is no formal procedure for the review of the
applications for this exemption. The application and its
documentation are reviewed for adequacy and to determine
if the facility is for air pollution control.
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APPEAL PROCEDURE
Appeals from the decision of the Commissioner of En-
vironmental Conservation are taken directly to the State
Supreme Court.
SOURCES OF INFORMATION
State Board of Equalization N. Y. State Department of
and Assessment Environmental Conservation
155 Washington Avenue 50 Wolf Road
Albany, New York 12210 Albany, New York 12205
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NEW YOBK
TYPE OF TAX INCENTIVE
Corporate income tax deduction
STATUTE
New York Consolidated Laws Chapter 60, Article 9A,
Section 208-9(g)
ELIGIBILITY REQUIREMENT
A deduction is allowed from net income for expenditures
paid or incurred during the taxable year on the acquisition
or construction of air pollution control facilities used in
connection with a trade, or business. Such deduction is
limited to depreciable property and is conditioned on obtain-
ing a certificate from the State Commissioner of Environ-
mental Conservation. The facility must remove, reduce or
render less noxious the contaminants from an air contamina-
tion source. Excluded from eligibility are parts of the
facility of which the primary purpose is to salvage valuable
materials.
APPLICATION PROCEDURE
Application for this deduction must be made to the
Commissioner of Environmental Conservation on Form 108. The
application form is available from the offices of the Depart-
ment. The taxpayer should file an election with his tax re-
turn for the year in which the deduction is taken. A copy
of the State certificate should be attached to the election
form.
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REVIEW PROCEDURE
There is no formal procedure for the review of applica-
tions for this exemption. The application and its documen-
tation are reviewed for adequacy and to determine if the
facility is, in fact, for air pollution control.
APPEAL PROCEDURE
Appeals irom the decisions of the Commissioner of En-
vironmental Conservation are taken directly to the State
Supreme Court.
COMMENTS
No depreciation deduction is allowed on such property
in subsequent years, but, if the property is sold, gain or
loss is reckoned by the treatment accorded the property
voider the Federal income tax.
SOURCES OF INFORMATION
Corporate Tax Bureau New York State Department of
State Department of Taxation Environmental Conservation
and Finance 50 Wolf Road
Albany, New York 12226 Albany, New York 12205
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NEW YORK
TYPE OF TAX INCENTIVE
Personal income tax deduction
Unincorporated business tax-deduction
STATUTE
New York Consolidated Laws Chapter 60, Article 22,
Section 612 (h)
New York Consolidated Laws Chapter 60, Article 23,
Section 706 (9)
ELIGIBILITY REQUIREMENT
A deduction is allowed from adjusted gross income ex-
penditures paid or incurred during the taxable year on the
acquisition or construction of air pollution control facil-
ities used in connection with a trade or business. Such
deduction is limited to depreciable property and is condi-
tioned on obtaining a certificate from the State Commissioner
of Health. To be eligible for the deduction, the facility
must remove, reduce or render less noxious the contaminants
emitted from an air contamination source; excluded from
eligibility are parts of the facility which have the salvage
of valuable materials as their primary purpose.
APPLICATION PROCEDURE
Application for certification is made to the Commission-
er of Environmental Conservation on Form 108. The applica-
tion form is available from the offices of the Department.
The taxpayer should file an election to take the deduction
with his tax return for the year in which the deduction is
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taken. A copy of the state certificate should be attached
to the election form.
REVIEW PROCEDURE
There is no formal review procedure for the review of
the applications for this exemption. The application and
its documentation are reviewed for adequacy and to determine
if the facility is for air pollution control.
APPEAL PROCEDURE
Appeals from the decisions of the Commissioner of
Environmental Conservation are taken directly to the State
Supreme Court.
SOURCES OF INFORMATION
Income Tax Bureau N.Y. State Department of
State Department of Taxation Environmental Conservation
and Finance 50 Wolf Road
Albany, New York 12226 Albany, New York 12205
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NORTH CAROLINA
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
General Statutes of North Carolina, Article 12,
Section 105-280 (15) (1943)
ELIGIBILITY REQUIREMENT
Real and personal property used exclusively for air
cleaning or air pollution abatement facilities are exempt
from property taxes if the following conditions and qualifi-
cations are met:
- if only a portion of a facility is used exclu-
sively for air cleaning or pollution abatement,
the portion so used will be exempt from property
taxes and the remainder will be taxed.
- the exemption is allowed only upon certification
of the facility by the Board of Water and Air
Resources. The Board determines whether or not
the facility is an air cleaning device and that
the facility complies with the Board's require-
ments . It also determines whether or not the
facility is being effectively operated in accord-
ance with the terms and conditions of the permit
issued by the Board. In addition, the Board
determines whether the primary purpose of the
facility is to reduce air pollution resulting
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from the emission of air contaminants. The
Board's certificate is delivered to the Tax
Supervisor of the county in which the air pollu-
tion abatement facility is located.
APPLICATION PROCEDURE
This exemption is claimed by completing and filing an
"Application for a Permit to Construct and/or Operate an
Air Pollution Control Facility". The application form is
available from the Department of Air and Water Resources.
The facility's plans, specifications and technical data must
be included as support information to the application.
REVIEW PROCEDURE
The Department of Air and Water Resources reviews the
application and supporting material to determine if the
facility meets the requirements, rules, regulations and
standards governing air pollution control facilities within
the state.
APPEAL PROCEDURE
A taxpayer may appeal the Department's decision on an
application for certification to the Board of Air and Water
Resources. Appeals from the Board's decisions are taken
directly to the Superior Court of the state.
SOURCES OF INFORMATION
Commissioner of Revenue Department of Air & Water Resources
State Department P. 0. Box 27048
Raleigh, N. C. 27602 Raleigh, N. C. 27611
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NORTH CAROLINA
TYPE OF TAX INCENTIVE
Corporate Income tax - rapid amortization deduction
Personal income tax - rapid amortization deduction
STATUTE
General Statutes of North Carolina, Article 4,
Section 105-130.10 (1943)
General Statutes of North Carolina, Section 105-147 (13)
ELIGIBILITY REQUIREMENT
A deduction for the amortization of the cost of any
air cleaning device or pollution abatement equipment which
meets the following conditions and qualifications is allowed
over a 60 month period.
- the device or equipment must reduce the amount
of air pollution resulting from emissions of
air contaminants or other polluting materials
into the atmosphere.
- the corporation claiming this deduction must
furnish the Commissioner of Revenue with a
certificate from the Board of Water and Air
Resources. The certificate will be issued by
the Board if it determines that the device or
equipment has actually been constructed and in-
stalled and that the device or equipment com-
plies with the Board's requirements.
- after the air pollution abatement facility is
in operation, the Board will determine whether
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or not the device or equipment is being
effectively operated in accordance with the
terms and conditions set forth in the permit
issued by the Board. It will also establish
that the primary purpose of the device or equip-
ment, as operated, is, in fact, to reduce air
pollution resulting from the emission of air
contaminants not merely incidental to other
purposes and functions.
- the deduction may be claimed for equipment in-
stalled before January 1, 1955, but only to the
extent of the present undepreciated value of
the equipment. (Effective June 12, 1969).
APPLICATION PROCEDURE
This exemption is claimed by completing and filing
with the Department of Air and Water Resources an "Applica-
tion for a Permit to Construct and/or Operate an Air Pollu-
tion Control Facility". The application form is available
from the Department. The facility's plans, specifications
and technical data must support the application.
REVIEW PROCEDURE
The Department of Air and Water Resources reviews the
application and supporting material to determine whether
the facility meets the requirements, rules, regulations and
standards governing air pollution control facilities within
the s tate.
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APPEAL PROCEDURE
A taxpayer may appeal the Department's decision on an
application for certification to the Board of Air and Water
Resources. Appeals from the Board's decisions are taken to
the Superior Court of the state.
SOURCES OF INFORMATION
Corporate Income and Franchise Department of Air & Water
Tax Division Resources
Commissioner of Revenue P- 0. Box 27048
Raleigh, N. C. 27602 Raleigh, N. C. 27611
Individual Income Tax Division
Commissioner of Revenue
Raleigh, N. C. 27602
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NORTH CAROLINA
TYPE OF TAX INCENTIVE
Franchise tax deduction
STATUTE
General Statutes of North Carolina, Section 105-122
ELIGIBILITY REQUIREMENT
The entire cost of any air cleaning device or pollution
abatement equipment may be treated as a deductible liability
reserve in the computation of the franchise tax, if the fol-
lowing conditions and qualifications are met:
- the device or equipment must reduce the amount
of air pollution which results from the emission
of air contaminants into the outdoor atmosphere.
- the corporation claiming the deductible liability
must furnish the Commissioner of Revenue with a
certificate from the Board of Water and Air
Resources certifying that the Board has found the
device or equipment actually constructed and in-
stalled and in compliance with the terms and
conditions of the Board's installation and
operation permit.
The Board will also determine whether the device or
equipment has as its primary purpose the reduction of air
pollution resulting from the emission of air contaminants.
APPLICATION PROCEDURE
This exemption is claimed by completing and filing an
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"Application for a Permit to Construct and/or Operate an
Air Pollution Control Facility". The application form is
available from the Department of Air and Water Resources.
The facility's plans, specifications and technical data
must be included as support information to the application.
REVIEW PROCEDURE
The Department of Air and Water Resources reviews the1
application and supporting material to determine whether
the facility meets the requirements, rules, regulations and
standards governing air pollution control facilities within
the state.
APPEAL PROCEDURE
A taxpayer may appeal the Department's decision on an
application for certification to the Board of Air and Water
Resources. Appeals from the Board's decisions are taken
directly to the Superior Court of the State.
SOURCES OF INFORMATION
Corporate Income and Franchise Department of Air &
Tax Division Water Resources
Commissioner of Revenue P. 0. Box 27048
Raleigh, N. C. 27602 Raleigh, N. C. 27611
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OHIO
TYPE OF TAX INCENTIVE
Property tax exemption
Sales and use tax exemption
Franchise tax exemption
STATUTE
Ohio Revised Code, Section 5709.25 (A)
Ohio Revised Code, Section 5709.25 (C)
ELIGIBILITY REQUIREMENT
A device which is designed, constructed or installed
for the primary purpose of eliminating or reducing the
emission of, or ground level concentration of, air contam-
inants which render air harmful or inimical to the public
health or property within the state, if certified as such by
the Tax Commissioner, is exempt from the above taxes. How-
ever, devices which have as their sole purpose either the
safety, health, protection, or benefit of the personnel, or
the benefit of the company are not exempt.
APPLICATION PROCEDURE
Applications must be filed with the Tax Commissioner
and must include, in addition to the items specified by the
Commissioner, plans and specifications of the structure in-
cluding all materials incorporated and to be incorporated
therein and a descriptive list of all equipment acquired or
to be acquired by the applicant for the purpose of pollution
control.
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REVIEW PROCEDURE
If the Tax Commissioner finds that the proposed facility
was designed primarily for the control of pollution of the
air and is suitable and reasonably adequate for such pur-
pose, he will issue a certificate to that effect.
APPEAL PROCEDURE
Appeals from refusals by the Tax Commissioner to grant
a certificate or from revocation of a certificate may be
taken to the Board of Tax Appeals.
COMMENTS
A certification, once granted, can be revoked by the
Commissioner if, after notice of and opportunity for hearing,
he finds that:
- the certificate was obtained by fraud or mis-
representation .
- the certificate holder has failed substantially
to proceed with the work.
- the facility has ceased to be used for the
primary purpose of pollution control.
SOURCES OF INFORMATION
Tax Commissioner , Ohio Air Pollution Control Board
State Department 450 East Town St.
Columbus, Ohio 43215 Columbus, Ohio 43216
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OREGON
TYPE OF TAX INCENTIVE
Property (ad valorem) tax exemption
STATUTE
Oregon Revised Statutes, Title 29, Sections 449.605,
307.405 (Property Tax)
ELIGIBILITY REQUIREMENT
Air pollution control facilities are exempt from proper-
ty taxes under the following conditions and qualifications:
- it is necessary to satisfy the intents and purposes
of the Oregon Revised Statutes, Chapter 449 and
regulations adopted thereunder.
- the facility must have been constructed on or
after January 1, 1967 and on or before
December 31, 1978.
- the Department of Environmental Quality must certify
the facility and a percentage of its aqtjial cost as
properly allocable to the prevention, control, or
reduction of air pollution.
- the taxpayer may elect to take this credit only if
an election has not been made to take the corporate
or personal income tax credit.
- the facility must be on Oregon property.
- the taxpayer must own or lease a business that
utilizes Oregon preperty which requires this facility
to prevent or minimize air pollution.
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the exemption shall expire 20 years from the
date of its first certification if the facility
was constructed on or prior to December 31, 1971.
If the facility was completed after 1971, the 20-
year exemption shall be reduced by a number of
years computed as follows:
- subtract 1971 from the year of completion.
- multiply the remainder by (2).
- subtract the product from the 20-year exemption,
and compute the available period of exemption.
the owner of a certified air pollution control
facility must give notice of any sale, exchange,
or other disposition of that facility to the
Sanitary Authority who will automatically revoke
the certification.
The new owner may apply for a new certificate,
but the number of years of exemption that may
be claimed by the new owner is the remainder of
the exemption period used by the original owner.
This exemption is not available for an air
pollution control facility erected, constructed,
or installed or first put into operation after
December 31, 1973, unless it is set up to prevent
air pollution from a business activity. Further
this business activity must be conducted by the
taxpayer on his owned or leased Oregon property
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as of January 1, 1971.
- if the facility is also used to prevent air
pollution on property that does not wholly qual-
ify for this exemption, the certification may
only cover that percentage of the facility which
is used in a qualifying business on qualifying
property.
- Federal grants or tax credits do not affect the
ad valorem exemption, nor are depreciation or
amortization deductions affected by the ad valorem
exemption.
- the facility must not be an air conditioner or
similar device, a septic tank or other facility
used for human waste disposal, or a facility
installed for moving sewerage to public sewage
facilities.
APPLICATION PROCEDURE
Application for this credit must be made to the Depart-
ment of Environmental Quality. It must contain information as
to the actual cost of the device, a description of the mate-
rials, all machinery and equipment that are part of the de-
vice, the proposed operational procedure, a statement of the
purpose to be served by the device and the proportional cost
of the device that is related to pollution control.
REVIEW PROCEDURE
The Environmental Quality Commission will act upon
applications within 120 days after their receipt. The Com-
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mission, upon finding that the device is proper, will issue
a certificate and a "Notice of Election" form. One copy of
the notice must be returned to the Department of Environ- *
mental Quality within 60 days after receipt of the certifi-
cate.
COMMENTS
Upon any sale, exchange, or other disposition of the
facility, the taxpayer shall notify the Department of
Environmental Quality who shall revoke the certification.
The Department may revoke a certificate if it was ob-
tained by fraud or if the facility is not operated for the
purpose of air pollution control.
SOURCES OF INFORMATION
Consult the tax assessor
in the county where the
facility is located.
State of Oregon
Department of Environmental
Quality
1234 S.W. Morrison Street
Portland, Oregon 97205
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OREGON
TYPE OF TAX INCENTIVE
Corporation excise and personal income tax credit
STATUTE
Oregon Revised Statutes, Sections 317.072, 449.605, and
316.480
ELIGIBILITY REQUIREMENT
A credit against corporation excise or income taxes is
available for owners of air pollution control facilities. To
qualify for this credit the taxpayer and the facility must meet
the following conditions and qualifications:
- the facility must satisfy the intents and purposes
of the Oregon Revised Statutes, Chapter 449 and
regulations adopted thereunder.
- the facility must not be an air conditioner or
similar device, a septic tank or other facility
used for human waste disposal, or a facility
installed for moving sewerage to public sewerage
facilities.
- the taxpayer must irrevocably claim either the
property tax exemption, the personal income tax
credit, or the corporate excise tax credit.
- this credit is in lieu of any depreciation or
amortization deduction for the facility to which
the taxpayer might otherwise be entitled.
- the maximum credit allowed in any one taxable
year is the lesser of the taxpayer's tax lia-
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bility or the following portion of the cost
of the facility allocable to pollution control:
a. five percent, if the portion of the actual
cost is 80 percent or more.
b. four percent, if the portion is 60 percent
or more, but less than 80 percent.
c. three percent, if the portion is 40 percent
or more, but less than 60 percent.
d. two percent, if the portion is 20 percent
or more, but less than 40 percent.
e. one percent, if the portion is less than
20 percent.
this credit may be claimed only in the tax years
beginning on or after January 1, 1967 and ending
on December 31, 1978 regardless of when the
facility was erected, constructed, or installed
during this period.
the taxpayer must be the owner of the business
that utilizes Oregon property requiring a pollu-
tion control facility to prevent or minimize
pollution. The "owner" may be a contract pur-
chaser of the property or he may be a lessee or
other person who operates the business under an
agreement that involves use of the property.
the facility must be owned or leased during the
tax year by the taxpayer and it must have been
in use and operation during that tax year.
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- the maximum total credit allowable shall not exceed
that obtained by taking the allowed credit for ten
consecutive years.
- the credit is to the extent of the highest per-
centage figure certified by the Sanitation Authority
as the portion of the actual cost properly allocable
to air pollution prevention, control or reduction.
- any credit not used in any particular year may be
carried forward and used only in the next three
years.
- no tax relief shall be allowed for any pollution
control facility constructed for, used by or for
the benefit of any governmental body or public cor-
poration .
APPLICATION PROCEDURE
An application for the credit must be made to the Depart-
ment of Environmental Quality. The application must contain
information as to the actual cost of the device, a description
of the materials, all machinery and equipment made a part of
the device, the proposed operational procedure, a statement of
purpose to be served by the device and the proportional cost
of the device that is related to pollution control.
REVIEW PROCEDURE
The Environmental Quality Commission acts on the applicatioi
within 120 days after its receipt. The Commission, upon finding
that the device is proper, will issue a certificate and a "Notice
of Election" form. One copy of the notice must be returned to
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the Department of Environmental Quality within 60 days after
receipt of the certificate.
APPEAL PROCEDURE
If no notification is received within 120 days, or if
the Commission acts unfavorably upon the application in any
respect, the taxpayer has the right to appeal to the circuit
court of the county of his residence, trade, or business lo-
cation within 30 days after denial.
COMMENTS
If a taxpayer obtains grants or tax credits from the
Federal Government in connection with a pollution control
facility that has been certified, the income or excise tax
credits under this statute must be reduced by the amount of
the Federal grant or tax credit. The taxpayer must notify
the State Department of Revenue of each application for such
Federal grants and tax credits. The notification must be made
in the taxpayer's next Oregon income or excise tax return.
Upon any sale, exchange, or other disposition of the facility
the taxpayer shall notify the Department of Environmental
Quality who shall revoke the certification.
The Department may revoke a certificate if it was ob-
tained by fraud or if the facility is not operated for the
purpose of air pollution control.
SOURCES OF INFORMATION
Income Division Administrator State of Oregon
State Department of Revenue Department of Environmental
Salem, Oregon 97310 Quality
1234 S.W. Morrison Street
Portland, Oregon 97205
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RHODE ISLAND
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Rhode Island General Laws, Section 44-3-3 (22)
ELIGIBILITY REQUIREMENT
Real and tangible personal property acquired and used
primarily to control the pollution or contamination of the
air, as defined by federal or state requirements or stand-
ards, is exempt from taxation so long as it is operated in
compliance with the order of approval from the Director of
Health.
APPLICATION PROCEDURE
Application for an order of approval of the treatment
facility must be filed with the Director of Health by letter.
No formal application form is necessary.
REVIEW PROCEDURE
There is an informal review of the application with the
Department utilizing its powers under the applicable pollu-
tion laws to obtain on-site inspection and other records.
APPEAL PROCEDURE
The usual administrative appeal procedures entitle the
applicant to a hearing before the Superior Court of the dis-
trict in which the Department sits.
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SOURCES OF INFORMATION
State Department of Community Division of Air Pollution
Affairs Control
Providence, Rhode Island 02903 204 Health Bldg.
Davis Street
Providence, Rhode Island
02908
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RHODE ISLAND
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Rhode Island General Laws, Section 44-18-30 (P)
ELIGIBILITY REQUIREMENT
Devices purchased primarily in furtherance of or in
compliance with federal and/or state requirements or stand-
ards for the control of air pollution and certified in an
order issued by the Division of Air Pollution Control are
exempt. Exemption certificates must be shown to the seller
to avoid the sales and use tax.
APPLICATION PROCEDURE
Application for a certified order should be made to the
Division of Air Pollution Control.
REVIEW PROCEDURE
There is an informal review of the application with the
Department utilizing its powers under the applicable pollu-
tion laws to obtain on-site inspection and other records.
APPEAL PROCEDURE
Usual administration appeal procedures entitle the
applicant to a hearing before the Superior Court for the
district in which the Department sits.
COMMENTS
A person may obtain the exemption certificate from the
Tax Administrator, 49 Westminister Street, Providence, Rhode
Island 02903. If the person has no exemption certificate,
he should pay the tax and later file a claim for a refund.
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SOURCES OF INFORMATION
Tax Commissioner Division of Air Pollution
State Tax Administration Control
Providence, Rhode Island 02903 204 Health Bldg.
Davis Street
Providence, Rhode Island
02908
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RHODE ISLAND
TYPE OF TAX INCENTIVE
Corporate income tax deduction - accelerated
amortization
STATUTE
Rhode Island General Laws, Section 44-11-11.1
ELIGIBILITY REQUIREMENTS
The adjusted basis of air pollution control devices
may be amortized over a period of 60 months beginning, at
the election of the taxpayer, either the month after com-
pletion of the device or the first month of the next taxable
year. The depreciation allowed is reckoned by dividing the
adjusted basis remaining at the beginning of the month in
question by the number of months remaining in the six month
period.
In order for an air pollution control device to qualify,
it must: 1) be in furtherance of or in accordance with
federal or state requirements or standards for the control
of air pollution or contamination, 2) be primarily for the
control of pollution or contamination of the air, 3) be
certified as approved in an order entered by the Director
of Health.
APPLICATION PROCEDURE
The taxpayer must file, with his return, a statement
saying that he is electing the accelerated method. Such
statement must be accompanied by an attested copy of an
order of approval entered by the Director of Health and a
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written statement by the Department of Health certifying that
the installation has been completed and is in proper opera-
tion.
REVIEW PROCEDURE
There is an informal review of the application with the
Department utilizing its powers under the applicable pollu-
tion laws to obtain on-site inspection and other records.
APPEAL PROCEDURE
The usual administration appeal procedures entitle the
applicant to a hearing before the Superior Court for the
district in which the Department sits.
SOURCES OF INFORMATION
Tax Administrator Division of Air Pollution
Department of Taxation Control
Providence, Rhode Island 02903 204 Health Bldg.
Davis Street
Providence, Rhode Island
02908
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SOUTH CAROLINA
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
South Carolina Code, Section 65-1522 (45.1)
ELIGIBILITY REQUIREMENT
Air pollution control devices operated by manufacturing
plants are exempt from property taxation.
APPLICATION PROCEDURE
Application for exemption should be made to the town-
ship boards of assessors as other applications are now made.
REVIEW PROCEDURE
There is no statewide review procedure. Each township
determines its own procedures.
APPEAL PROCEDURE
The South Carolina Tax Commission is authorized to re-
view decisions of the township boards of assessors to de-
termine whether such assessment was correctly decided. The
Commission has the power to order a new assessment.
SOURCES OF INFORMATION
Property Tax Division Division of Air Pollution
South Carolina Tax Commission Control
State Capitol Owen Bldg.
Columbia, South Carolina 29202 1321 Lady Street
P. 0. Box 11628
Columbia, South Carolina 29211
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TENNESSEE
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Tennessee Code Annotated, Section 67-512
ELIGIBILITY REQUIREMENT
Any air pollution control device or any part of any
other property used and which is primarily for and necessary
to the control, reduction or elimination of air pollution,
is exempt from the property tax.
APPLICATION PROCEDURE
Application for exemption must be made to the Tennessee
Bureau of Environmental Health or to designated county health
boards which will issue a certificate to the applicant upon
finding that the device complies with the requirements of
Tennessee law (designated counties: Davidson, Hamilton,
Rnox, and Shelby). Applications are available from the
Bureau of Environmental Health.
REVIEW PROCEDURE
Upon receipt of the application, the Bureau or the
county health board will inspect the device and review the
information to determine whether the device is used to con-
trol air pollution.
APPEAL PROCEDURE
There is no specific appeal provided from the decisions
of the Bureau or the county health boards. However, de-
cisions may be appealed through the state courts.
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SOURCES OF INFORMATION
Commissioner of Taxation Tennessee Air Pollution Control
Department of Revenue Board
Nashville, Tennessee 37219 Bureau of Environmental Health
C2-212 Cordell Hull Bldg.
Nashville, Tennessee 37219
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VERMONT
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
10 Vermont Statutes Annotated, Section 369
ELIGIBILITY REQUIREMENT
Approved air pollution equipment is exempt from real
and personal taxation.
APPLICATION PROCEDURE
To obtain approval of air pollution equipment contact the
State Air Control Officer for instructions.
REVIEW PROCEDURE
No formalized procedure exists.
APPEAL PROCEDURE
Appeals from the decisions of the State Air Pollution
Control Officer are taken to the State Board of Health, and
further appeals are taken to the state courts.
COMMENTS
The Vermont statute is vague as to whom applications
must be made and by what standards the devices will be
judged.
SOURCES OF INFORMATION
Commissioner of Taxes Agency of Environmental
State Capitol Conservation
Montpelier, Vermont 05602 Air Pollution Control
Montpelief, Vermont 05602
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VIRGINIA
TYPE OF TAX INCENTIVE
Income tax - accelerated amortization deduction
STATUTE
Virginia Code, Section 58-81.1
ELIGIBILITY REQUIREMENT
The cost of an air pollution control device installed
and completed pursuant to any order, directive or other
requirement or with the consent and approval of the State
Air Pollution Board may be amortized over a period of 60
months. No amortization is allowed on other than deprecia-
ble property.
APPLICATION PROCEDURE
Written notice of election to take this amortization
must be filed with the Department of Taxation on or before
the filing date of the return for the first taxable year.
In addition, copies of the recommendations, orders and
approvals issued by the State Air Pollution Control Board in
respect to such devices shall be filed with the Department
of Taxation.
REVIEW PROCEDURE
Upon receipt of the application, the Board will inspect
and otherwise ensure the facility fits the state's require-
ments for air pollution control devices.
APPEAL PROCEDURE
There is no administrative procedure for the appeal of
the decisions of the State Air Pollution Control Board.
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Appeals from the Board's decisions are taken directly to
the state courts.
SOURCES OF INFORMATION
Department of Taxation State Air Pollution Control
State Capitol Board
Richmond, Virginia 23215 Room 1106
Ninth Street Office Bldg.
Richmond, Virginia 23219
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WASHINGTON
TYPE OF TAX INCENTIVE
Sales and use tax exemption
STATUTE
Washington Statutes, Section 82.34.050
ELIGIBILITY REQUIREMENT
The original acquisition of an air pollution control
device by the holder of a credit certificate is exempt from
the sales tax. The exemption, however, does not apply to
servicing, maintenance, repairs and replacement of parts
after a device is complete and in operation. If a person
so chooses, he may elect not to claim the exemption, and
apply the sales tax paid against the business and occupation
tax, the use tax, or the public utility tax.
APPLICATION PROCEDURE
An application for credit certificates shall be filed
with the Department of Revenue. The application shall con-
tain estimated or actual costs, plans and specifications of
the device including all materials incorporated or to be in-
corporated therein, and a list describing and showing the
cost of all equipment acquired or to be acquired by the
applicant together with a time schedule for acquisition and
installation of the device.
REVIEW PROCEDURE
Within 30 days, a certificate will be issued if the
appropriate control agency finds that the facility is de-
signed and is operated primarily for the control, capture,
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and removal of pollutants from the air. In making such a
determination, the appropriate control agency shall afford
the applicant an opportunity for a hearing.
APPEAL PROCEDURE
If the local or regional air pollution control agency
fails to act, or if the applicant feels aggrieved by the
action taken, an appeal is available to the state's air pol-
lution control board
SOURCES OF INFORMATION
Department of Revenue Ecological Commission
State Capitol P. 0. Box 820
Olympia, Washington 98501 Olympia, Washington 98504
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WISCONSIN
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Wisconsin Statutes 70.11 (21)
ELIGIBILITY REQUIREMENT
All air pollution control devices purchased or con-
structed with the approval of the Department of Resource
Development, Department of Natural Resources, State Board
of Health, a city council, a village board or county board
is exempted from general property taxation. This exemption
applies only to air pollution control devices associated
with income-producing equipment.
APPLICATION PROCEDURE
A taxpayer may claim this exemption by filing an Appli-
cation for Property Tax Exemption for Air Pollution Control
Facilities (Form PA 008) with the State Bureau of Air
Pollution Control. This form is available from either the
Department of Revenue or the Bureau of Air Pollution Control.
When approval of the application is received from the Bureau,
the taxpayer must file an annual statement not later than
May 10th with the Supervisor of Assessment of the Department
of Revenue in the district in which the device is located.
Forms for the annual statement are available from the Depart-
ment of Revenue.
REVIEW PROCEDURE
Upon receipt of the application, the Bureau investi-
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gates and inspects the device to ensure that it is an air
pollution control device. Then, if the device is approved,
the application is signed and sent to the local tax assessor.
APPEAL PROCEDURE
A taxpayer may appeal the Bureau of Air Pollution Con-
trol's decision in a public hearing with the Bureau. The
Board of the Natural Resources Department will then make a
decision based on the record of the hearing. An appeal from
the Board's decision is made to the state courts.
SOURCES OF INFORMATION
Department of Revenue Air Pollution Control
Property and Special Tax Division Section
State Capitol Bureau of Air Pollution
Madison, Wisconsin 53701 and Solid Waste Disposal
4610 University Avenue
Madison, Wisconsin 53705
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WISCONSIN
TYPE OF TAX INCENTIVE
Corporate income tax credit - accelerated amortization
deduction
STATUTE
Wisconsin Statutes 71.04 (2b)
ELIGIBILITY REQUIREMENT
The cost of all air pollution devices pursuant to order,
recommendation or approval of the Department of Resource
Development, Department of Natural Resources, state board of
health, city council, village board, or county board pur-
suant to Section 59.07 (53) or (35) may be deducted in the
year paid, may be depreciated, or may be amortized over a
period of 5 years. The deduction election, once made, can-
not be changed. In no event shall the sum of past and cur-
rent year deductions be permitted in excess of the cost of
the device. No deduction shall be allowed on other than
depreciable property.
APPLICATION PROCEDURE
The taxpayer files copies of recommendations, orders
and approvals issued by the Department listed under the
previous heading, with the Department of Revenue at the
time of his election for accelerated depreciation.
REVIEW PROCEDURE
If found necessary, the Department of Natural Resources
will inspect the facility. There is no formal procedure for
informing the company of what decision has been reached.
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APPEAL PROCEDURE
The taxpayer has 30 days to submit a formal appeal
to the Department of Revenue, which passes the appeal to a
conferee. From the conferee, the appeal is passed to the
Division Chief. If the corporation is not satisfied with
the decision, an appeal may be made to the Wisconsin Tax
Board of Tax Appeals, and finally through the State Courts.
SOURCES OF INFORMATION
Department of Revenue Air Pollution Control Section
Income, Sales and Excise Tax Bureau of Air Pollution Control
Division and Solid Waste Disposal
State Capitol 4610 University Avenue
Madison, Wisconsin 53701 Madison, Wisconsin 53705
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WISCONSIN
TYPE OF TAX INCENTIVE
Personal income tax - accelerated amortization
deduction
STATUTE
Wisconsin Statutes 71.05 (1) (h)
ELIGIBILITY REQUIREMENT
When acquired pursuant to order, recommendation or
approval of the Department of Resource Development, Depart-
ment of Natural Resources, State Board of Health, City
Council, village or county board pursuant to Section 59.07
(53) or (85), the cost of air pollution devices, less any
Federal depreciation taken, can be deducted from the tax-
payer's adjusted gross income. Appropriate modifications
must be made in subsequent years to reverse Federal depre-
ciation or to correct gain or loss indisposition. The
acceleration is allowed only on depreciable property and
only up to the cost of the device.
APPLICATION PROCEDURE
The taxpayer files with the Department of Revenue
copies of all recommendations, orders or approvals relating
to the installation of such property and such other docu-
ments or data as the Department requests. The city, county,
state or the Department of Natural Resources may be con-
tacted for the maximum amount of information.
REVIEW PROCEDURE
If found necessary, the Department of Natural Resources
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will inspect the facility. There is no formal procedure
for informing the company of the decision that has been
reached.
APPEAL PROCEDURE
The taxpayer has 30 days to submit a formal appeal to
the Department of Revenue, which passes the appeal to a con-
feree. From the conferee, the appeal is passed to the
Division Chief. If the corporation is not satisfied with
the decision, an appeal may be made to the Wisconsin Tax
Board of Tax Appeals, and finally through the State courts.
SOURCES OF INFORMATION
Department of Revenue Air Pollution Control Section
Income, Sales and Excise Bureau of Air Pollution Control
Tax Division and Solid Waste Disposal
State Capitol 4610 University Ave.
Madison, Wisconsin 53701 Madison, Wisconsin 53705
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WYOMING
TYPE OF TAX INCENTIVE
Property tax exemption
STATUTE
Wyoming Statutes 35-501
ELIGIBILITY REQUIREMENT
Air pollution control devices are exempt from the
property tax if they are designed, installed and utilized
to eliminate, control or prevent air pollution. Should
such a device also serve other beneficial purposes, the
portion of the assessed valuation of the device which is
reasonably calculated to eliminate, control or prevent air
pollution is exempt. The State Board of Equalization de-
termines such exempt portion.
APPLICATION PROCEDURE
This exemption may be claimed by completing and filing
the exemption application form for air pollution control
facilities. The form is available from the Ad Valorem Tax
Department of the State Department of Revenue.
REVIEW PROCEDURE
The Ad Valorem Tax Department reviews exemption appli-
cation. A physical inspection is made of the facility to
determine whether its purpose is air pollution control, and
to what extent, if any, it produces a benefit of economic
value. Generally, the Department requests the Health Depart-
ment to determine whether it is functioning properly as an
air pollution control facility and, if so, what portion is
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used for control.
APPEAL PROCEDURE
Appeals from the decision of the Ad Valorem Tax Depart-
ment are taken to the State Board of Equalization. Further
appeal may be made to the District Court.
SOURCES OF INFORMATION
Commission of Taxation Wyoming Air Resources Council
Wyoming State Tax Commission State Office Bldg.
Cheyenne, Wyoming 82001 Cheyenne, Wyoming 82001
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GLOSSARY
Ad Valorem Tax
Air Pollution Control
Facilities
Air Quality Criteria
Document
Air Quality Standard
Taxation based on the true value
of any given taxable item.
This definition is dependent on the
exact nature of the law(s) in
question, but generally it is a
piece of equipment or a system
that will abate or lessen the
emission of an air pollutant from
a source.
A document issued by the Federal
EPA which assesses and consoli-
dates the current state of knowledge
on the origin and effects of a
single or group of air pollutants.
The maximum allowable concentration
of pollutants in the ambient air.
Amortization
Amortizable Basis
Book Value
A compensation for the gradual ex-
tinguishment of a facility or
property by periodic contribution
to a sinking fund. (Often used
interchangeably with "depreciation".)
The value assigned to a facility or
property for the purpose of amortiza-
tion or depreciation.
The value of equipment carried on the
accounting books. It consists of
the asset value minus depreciation
(see depreciation) plus salvage value,
if any.
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GLOSSARY (Cont'd)
Depreciation
Franchise Tax
Implementation Plans
Service Occupation Tax
Service Use Tax
Use Tax
A reasonable allowance for the ex-
haustion, wear and tear of proper-
ty used in the trade or business,
including a reasonable allowance
for obsolescence. (Often used
interchangeably with
"amortization".)
A tax levied by a state on a cor-
poration for the privilege of
doing business in that state.
Plans submitted by state air pol-
lution control agencies to the
Federal EPA to define exactly how
they intend to achieve and main-
tain national air quality stand-
ards in accord with Section 110
of the Clean Air Act.
An Illinois tax paid by service-
men and professionals on the cost
of tangible property purchased and
transferred incidentally to the
sale of a service.
An Illinois tax paid by service-
men and professionals on the cost
of tangible property bought and
used outside the state prior to
being used inside Illinois in
connection with the sale of a
service.
A tax usually similar to a sales
tax. The definition of a use tax
varies by state.
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