43-1182

43-1182. Credit for water conservation system
plumbing stub outs installed in houses constructed by taxpayer;
definition

A. Subject to subsections F and G, for taxable years beginning from and after
December 31, 2006 and ending before January 1, 2012, a credit is allowed against the
taxes imposed by this title for costs incurred during the taxable year of installing or
including in one or more houses or dwelling units located in this state and constructed
by the taxpayer a water conservation system plumbing stub out that collects all graywater
sources that end at a plumbing stub out that is separate and distinct from the regular
plumbing system. To qualify for the credit the stub out must:

1. Comply with rules that are adopted by the department of environmental quality
and that relate to the direct reuse of reclaimed water.

2. Meet applicable local building codes.

B. The credit shall not exceed two hundred dollars for each separate house or
dwelling unit in which the water conservation system plumbing stub outs are installed.

C. If the allowable credit exceeds the taxes otherwise due under this title on the
claimant's income, or if there are no taxes due under this title, the amount of the
credit not used to offset taxes under this title may be carried forward to the next five
consecutive taxable years as a credit against subsequent years' income tax liability.

D. Co-owners of a business, including corporate partners in a partnership, may each
claim only the pro rata share of the credit allowed under this section based on the
ownership interest. The total of the credits allowed all such owners may not exceed the
amount that would have been allowed a sole owner.

E. The credit allowed under this section is in lieu of any expenses taken for
installing water conservation system plumbing stub outs in computing Arizona taxable
income.

F. Beginning from and after December 31, 2006, the department shall receive and
evaluate applications that are submitted by taxpayers to receive a water conservation
system plumbing stub out credit under this section. A taxpayer shall apply for the credit
to the department on a form prescribed by the department. The application shall be filed
with the department and the department shall issue a receipt to the applicant. The
application shall include:

1. The name, address and social security number or federal employer identification
number of the applicant.

2. The amount of the cost of the water conservation system plumbing stub out and
the amount for which the credit is claimed.

3. Any additional information that the department requires.

G. The department shall review each application under subsection F and certify to
the taxpayer the amount of the credit that is authorized. The department shall not
certify tax credits under this subsection exceeding five hundred thousand dollars for any
calendar year. If qualifying applications exceed five hundred thousand dollars, the
department shall authorize credits in the order of the date that the applications are
received by the department. If an application is received that, if authorized, would
require the department to exceed the five hundred thousand dollar limit, the department
shall grant the applicant only the remaining credit amount that would not exceed the five
hundred thousand dollar limit. After the department authorizes five hundred thousand
dollars in tax credits, the department shall deny any subsequent applications that are
received. The department shall not authorize any additional tax credits that exceed the
five hundred thousand dollar limit even if the amounts that have been certified to any
taxpayer were not claimed or a taxpayer otherwise fails to meet the requirements to claim
the additional credit.

H. The department may verify that a water conservation system plumbing stub out has
been installed by the taxpayer.

I. For the purposes of this section, "water conservation system" means a system or
a series of components or mechanisms that are designed to provide for the collection of
rainwater or residential graywater. Water conservation system includes a system that is
capable of storing rainwater or residential graywater for future use and reusing the
collected water for the same residential property.