Thursday, October 6, 2011

Sales Tax Holiday and Energy Efficient Products

Submitted by Paige Biddlecomb, CPA

From Friday, October 7, 2011 through Monday, October 10, 2011, purchase of certain Energy Star and WaterSense qualified products purchased for non-commercial use and costing $2,500 or less, will be exempt from Virginia sales tax. The exempt Energy Star items include dishwashers, clothes washers, refrigerators, air conditioners, ceiling fans, compact fluorescent light bulbs, dehumidifiers, and programmable thermostats that carry the Energy Star designation. The exempt WaterSense items include bathroom sink faucets, faucet accessories, showerheads, and toilets.

Virginia also launched an Energy Efficiency Rebate Program. Energy efficient improvements include upgrading HVAC, adding insulation, replacing windows, and other improvements to existing homes and businesses to reduce energy consumption and utility costs. Homeowners are eligible for rebates of up to 20% of their costs, up to $4,000. Home and business owners also could qualify for an additional $250 for an energy audit. More information about this program is available at

In addition to the Virginia Sales Tax Holiday and Rebate program, you can qualify for a residential energy tax credit on your 2011 Federal tax return. You can take up to 10% of the cost of the qualifying item and deduct a credit of up to $500. To qualify for the residential energy tax credit, the improvements must be made to your existing principal residence. Certain insulation products, roofs, and doors qualify for up to $500. Windows and skylights credit is capped at $200 and must carry the Energy Star certification. Qualifying furnace and boilers are capped at $150 credit and all must meet 95 AFUE. A $50 maximum credit for certain advanced main air circulating fan, and $300 for qualifying air conditioners, air source heat pumps, water heaters, and bio mass stoves. Save your receipts and the Manufacturers Certification Statement for your records.

If you have taken the residential energy credit of over $500 from 2006-2010 on your Federal tax return, you are not eligible for any additional credit for 2011.

Homeowners who install renewable-energy devices in their principal residence or second home qualify for an even bigger tax break: 30% of the cost with no maximum. Qualifying improvements include geothermal heat pumps, solar-powered water heaters, solar panels, fuel cells, and small wind-energy systems. The qualifying equipment can be installed in new or existing homes. This credit is available through December 31, 2016, although non-refundable; it is unlimited and can be carried forward indefinitely.

You can find more information about the qualifying products at or