On September 17, 2021, the New York State Division of Taxation and Finance got here out with a second (revised) preliminary evaluation mannequin for estimating photo voltaic and wind energy initiatives. Its preliminary preliminary analysis mannequin was launched on August 2, 2021. Feedback on each proposed property tax evaluation fashions are due on October 1, 2021.
All native tax jurisdictions in New York would require using a tax evaluation mannequin to evaluate renewable power initiatives. The publication and use of a uniform methodology for estimating renewable initiatives is one in all a number of latest adjustments to New York actual property tax legal guidelines (RPTL), which the state lately launched to advertise photo voltaic, wind and different renewable power initiatives. is enacted.
A kind of adjustments required native tax assessors to undertake an analogous earnings capitalization, or discounted money circulation, valuation method to evaluate renewable power belongings. An earnings capitalization method values the challenge utilizing the online current worth of the challenge’s future money flows utilizing a specified capitalization fee. Native tax assessors are required to make use of the brand new technique beginning with the 2022 evaluation roll.
The rollout of the proposed property tax calculator of the New York Division of Taxation and Finance is a piece in progress. The mannequin makes use of a lot of “auto-fill” default assumptions for income and bills for photo voltaic and wind initiatives that usually don’t mirror the initiatives’ precise revenues and bills. A number of issues have been raised, together with estimated low cost charges, capability components and unrealistic assumptions for actual property lease funds, which are sometimes a big expense for third-party-owned renewable power initiatives.
Revised Mannequin #2 goals to repair a few of these points. The second mannequin is split into two spreadsheets, one for industrial distributed photo voltaic initiatives and one for utility scale initiatives. The revised preliminary mannequin seems to right some errors within the preliminary mannequin, however nonetheless makes use of comparatively low low cost charges, a capability issue not often achieved by many initiatives, and low website lease funds.
The Division of Taxation and Finance emphasizes that each fashions are preliminary, and feedback needs to be filed on each fashions 1 October 2021, After evaluate of feedback obtained in the course of the remark interval, the ultimate analysis mannequin might incorporate assumptions from Mannequin #1 or Mannequin #2 or some mixture thereof, or the assumptions could also be revised. Please seek advice from Appraisal Methodology for Photo voltaic and Wind Vitality Tasks for a duplicate of the Revised Appraisal Methodology.
©2022 Pierce Atwood LLP. All rights reserved.Nationwide Legislation Assessment, Quantity XI, No. 263