2010 Arizona Revised Statutes
Title 43 - Taxation of Income
43-1031 Subtraction for constructing an energy efficient residence

43-1031. Subtraction for constructing an energy efficient residence

A. For taxable years beginning from and after December 31, 2001 through December 31, 2010, in computing Arizona adjusted gross income a taxpayer may subtract five per cent of the sales price, excluding commissions, taxes, interest, points and other brokerage, finance and escrow charges, of one or more new single family residences, condominiums or town houses that are sold by the taxpayer and that exceed the 1995 model energy code by fifty per cent or more as determined by an approved rating program. Rating programs shall meet the United States department of energy's home energy rating system guidelines or other guidelines approved by the department of commerce energy office. The amount of the subtraction shall not exceed five thousand dollars with respect to each new single family residence, condominium or town house.

B. The department of commerce energy office shall:

1. Annually review the threshold rating used to determine eligibility for the subtraction.

2. If the number of homes receiving a subtraction in a single year exceeds five per cent of the new homes built in this state as estimated by the department of commerce, increase the qualifying rating by five per cent for the next taxable year.

3. Provide an annual list to the department of revenue of the criteria used to determine an energy efficiency rating that qualifies for a subtraction pursuant to this section.

C. The taxpayer may elect to transfer a subtraction under this section to the purchaser of the residence or to the financial institution that secures a mortgage or deed of trust on the residence. If the taxpayer transfers the subtraction, the taxpayer shall deliver to the purchaser or financial institution a written statement that the taxpayer has elected not to claim the subtraction and that the purchaser or financial institution may claim the subtraction, subject to the conditions and limitations prescribed by this section.