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Energy Tax Incentives and the Alternative Minimum Tax

Author

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  • Curtis Carlson
  • Gilbert Metcalf

Abstract

We take a first look at limitations on the use of energy-related tax credits contained in the General Business Credit Credit (GBC) due to limitations within the regular corporate income tax as well as the AMT. Between 2000 and 2005, firms were unable to use all energy-related tax credits due to GBC limitations in the regular tax. The AMT has a smaller but still pronounced impact on the ability of firms to use these credits. Finally, we provide some illustrative calculations to demonstrate how the AMT can lead to very different levelized costs of producing electricity from a wind power project.

Suggested Citation

  • Curtis Carlson & Gilbert Metcalf, 2008. "Energy Tax Incentives and the Alternative Minimum Tax," Discussion Papers Series, Department of Economics, Tufts University 0722, Department of Economics, Tufts University.
  • Handle: RePEc:tuf:tuftec:0722
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    File URL: http://ase.tufts.edu/econ/research/documents/2008/metcalfTaxIncentives.pdf
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    References listed on IDEAS

    as
    1. Mihir Desai & Dhammika Dharmapala & Monica Singhal, 2010. "Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit," NBER Chapters,in: Tax Policy and the Economy, Volume 24, pages 181-205 National Bureau of Economic Research, Inc.
    2. Lyon, Andrew B., 1990. "Investment Incentives under the Alternative Minimum Tax," National Tax Journal, National Tax Association, vol. 43(4), pages 451-65, December.
    3. Gilbert E. Metcalf, 2006. "Federal Tax Policy Towards Energy," NBER Working Papers 12568, National Bureau of Economic Research, Inc.
    4. Desai, Mihir & Dharmapala, Dhammika & Singhal, Monica, 2008. "Investable Tax Credits: The Case of the Low Income Housing Tax Credit," Working Paper Series rwp08-035, Harvard University, John F. Kennedy School of Government.
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    Cited by:

    1. Gilbert Metcalf & David Weisbach, 2008. "The Design of a Carbon Tax," Discussion Papers Series, Department of Economics, Tufts University 0727, Department of Economics, Tufts University.
    2. Gilbert E. Metcalf, 2010. "Investment in Energy Infrastructure and the Tax Code," NBER Chapters,in: Tax Policy and the Economy, Volume 24, pages 1-33 National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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