A Healthier Bottom Line

By Dana Teller

Sweeping the nation, the green effect has not only proven motivational, but also financially rewarding. With eco-friendly awareness at the forefront of everyone’s mind, individuals and businesses are discovering they can make a difference while simultaneously reducing their fuel and energy costs.  Even so, many companies continue to resist joining the going-green movement, so a strategic question for them might be: Can being environmental also be fundamental? The answer is yes.  Despite their arduous and costly stigma, green decisions and sustainable practices minimize costs in the long run.  With numerous energy efficiency tax incentives included in the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”), going green is more beneficial than ever. So reuse, recycle and reduce your tax liability. The Recovery Act created several new business tax incentives, and also amended certain incentives established in prior acts.  Let’s take a look at the green menu:

Energy Manufacturing Tax Credit
Manufacturers can take a 30% credit for investments in new, expanded, or redesigned advanced energy manufacturing projects, including technologies creating energy from renewable resources, advanced lighting, plug-in electric vehicles and vehicle components (like motors and generators), carbon dioxide capturing property, and other property designed to reduce greenhouse gas emissions. Projects must be completed within four years of the tax credit acceptance.

Business Energy Investment Tax Credit
Any type of business can take a tax credit of up to 30% for investments in alternative energy property designed for the taxpayer’s own use.  Alternative energy property includes solar property and ground water used to generate electricity for heating and cooling a structure.

Energy Efficient Commercial Buildings Tax Deduction
Businesses can deduct up to $1.80 per square foot if they install interior lighting, building envelope, HVAC or hot water systems that reduce the building’s total energy and power cost by 50% or more compared to a building that meets the minimum requirements in the guidelines of the American Society of Heating, Refrigerating, and Air-conditioning engineers.  The deduction is available for both new and existing buildings. In addition, buildings that utilize energy-efficient systems meeting certain target levels as to overall energy savings may be eligible for the deduction.  Deductions are taken in the year construction is completed.

Energy Efficient Appliance Credit
U.S. Manufacturers can take credits in 2010 up to $75 for washers, $200 for refrigerators and $45 for dishwashers manufactured in 2010 that are considered “energy efficient”.

In addition to the above, certain qualified reuse and recycling property (e.g. machinery or equipment that is used exclusively to collect, distribute or recycle qualified reuse and recyclable materials) is eligible for a special allowance of 50% in a manner similar to bonus depreciation for new property purchases.

Finally, going green can result in other savings near and dear to a CFO’s heart. For example, you could consider:
Switching company-owned vehicles to hybrids which may qualify for income tax credits for vehicles placed in service in 2010. Also, credits up to 10% of certain costs of converting new or used vehicles into qualified plug-in electric drive motor vehicles are available for vehicles placed in service before 2012.    

Replacing lighting with high-efficiency fluorescent units that greatly increase lamp life, and produce the same amount of light, while using one-fourth the wattage of other lights.

For those who are lacking in eco-expertise but have an urge to conserve, consider that Tampa Electric offers free energy audits designed to (i) help businesses efficiently use their energy and (ii) identify energy-saving measures that can earn incentives for average kilowatt reduction.  And for those of you who never know what to do with your obsolete or old electronics, consider contacting Creative Recycling Systems (a Tampa based recycling company that provides solutions for surplus and end-of-life electronic products) at (813) 621-2319 or through their website at www.crserecycling.com.  Electronic products contain hazardous substances such as lead, cadmium, and mercury and the personnel at Creative are committed to  preventing the release of these harmful substances into our environment.

Remember, there are some limitations and complexities associated with these credits, so, as always, we recommend you consult with your tax advisor if you believe you might quality for any of them. In closing, be a conservation crusader and embark on an eco-friendly path so that you can curb your company costs, because the bottom line says it all – It pays to go green! 
   

About the Author
Dana Teller is a member of the audit staff of Kingery & Crouse, P.A.  Certified Public Accountants, located in Tampa, Florida.  Kingery & Crouse, P.A. is a full service public accounting firm with a staff of dedicated professionals providing audit (including SEC), tax and accounting services.  You may contact Kingery & Crouse at 813. 874.1280 or find us on the web @ www.tampacpa.com.