Virginia Income Tax Credits on Energy Efficient Products

For taxable years beginning on and after January 1, 2007, an amount equal to 20% of the sales tax paid by an individual (pursuant to the VA Code, Chapter 6, title 58.1-600), not to exceed $500 in each taxable year, in purchasing for his own use the following items of tangible personal property:

• any clothes washers, room air conditioners, dishwashers, and standard size refrigerators that meet or exceed the applicable ENERGY STAR efficiency requirements developed by the United States Environmental Protection Agency (EPA) and the United States Department of Energy (DOE);
• any fuel cell that (a) generates electricity using an electrochemical process, (b) has an electricity-only generation efficiency greater than 35%, and (c) has a generating capacity of at least two kilowatts;
• any gas heat pump that has a coefficient of performance of at least 1.25 for heating and at least 0.70 for cooling;
• any electric heat pump hot water heater that yields an energy factor of at least 1.7;
• any electric heat pump that has a heating system performance factor of at least 8.0 and a cooling seasonal energy efficiency ratio of at least 13.0;
• any central air conditioner that has a cooling seasonal energy efficiency ratio of at least 13.5;
• any advanced gas or oil water heater that has an energy factor of at least 0.65;
• any advanced oil-fired boiler with a minimum annual fuel-utilization rating of 85;
• any advanced oil-fired furnace with a minimum annual fuel-utilization rating of 85; and
• programmable thermostats.”

For example, if a consumer purchases an ENERGY STAR qualified refrigerator for $1,000 and pays the 5% VA sales tax, the tax on this purchase will be $50.00. 20% of that sales tax paid is $10.00. This is the amount you can claim as your VA income tax deduction.

The Department of Taxation is working on the necessary forms and will be included in the 2007 tax booklet. DMME will provide this link when available.

To take advantage of additional energy efficiency tax incentives provided by the Federal Government, go to www.energytaxincentives.org.

*** Please note you will need Adobe's Acrobat Reader or Microsoft Word Viewer in order to view documents on this page.