New Legislation Extends Energy Tax Credits to Landfill Gas

On October 22, 2004, President Bush signed into law the American Jobs Creation Act of 2004. Contained within the bill’s 663 pages are tax incentives to encourage the development of renewable energy sources.

Among the incentives is the extension of the alternate energy tax credit to electricity produced from landfill gas. This tax credit, found at Section 45 of the Internal Revenue Code, had previously granted a per-kilowatt tax credit only to energy produced from wind, poultry waste, and “closed-loop biomass” (organic plant material). In addition to landfill gas, the new legislation also covers geothermal energy, solar energy, and small irrigation power.