Energy Conservation Investments Deduction

Overview

Montana provides incentives to encourage the use of alternative energy and the conservation of energy. The Energy Conservation Investments Deduction is available to businesses that pay the Montana Corporate Income Tax that make energy conservation capital investments in a Montana building.

Eligibility

Persons and firms primarily engaged in providing gas or electricity derived from fossil fuel extraction or conventional hydroelectric development are not eligible to claim the Energy Conservation Investments Deduction. Otherwise, a taxpayer may be able to deduct a portion of their expenditure for a capital investment in a building for an energy conservation purpose that is not financed by state, federal, or private grant funds for energy conservation.

Benefit

If eligible, and subject to Department approval, the taxpayer may deduct up to $1,800 or $3,600 from their corporate income tax in accordance with the following schedule:

Residential Buildings

This table shows how much of a residential energy-conservation investment you can deduct, up to a maximum of $1,800.

Residential buildings deduction schedule
Expenditure tier Deduction amount
100% of the first $1,000 expended $1,000
50% of the next $1,000 expended $500
20% of the next $1,000 expended $200
10% of the next $1,000 expended $100
Maximum deduction $1,800

Nonresidential Buildings

This table shows how much of a nonresidential energy-conservation investment you can deduct, up to a maximum of $3,600.

Nonresidential buildings deduction schedule
Expenditure tier Deduction amount
100% of the first $2,000 expended $2,000
50% of the next $2,000 expended $1,000
20% of the next $2,000 expended $400
10% of the next $2,000 expended $200
Maximum deduction $3,600

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