We help a wide variety of clients in maximizing the documentation of hiring credits, equipment credits,tax deductions and other incentives associated with greening their business operations.

The following summary represents a non-exhaustive list of currently available benefits under the state and/or federal tax statutes:

California Tax Breaks

1) Enterprise Zone Sales/Use Tax Credits – any business operating in one of California’s 42 Enterprise Zones is eligible to claim an income/franchise tax credit equal to the sales or use tax paid on purchased or certain leased assets used in manufacturing, processing, research & development, pollution control or energy conservation. Proposals to allow new or retro-fitted clean-burning vehicles to qualify for this California credit are also being evaluated. This benefit translates into an asset acquisition reduction in the 7% to 9% range at the state level, and these eligible assets often generate federal tax benefits.

2) Research & Development Credits – Available to taxpayers conducting in-house development of new technologies, including energy and pollution control. Combined federal and state credits up to 13% of incremental R&D expenditures.

Federal Tax Breaks

1) Energy Efficient Commercial Building Credits – any business owning or leasing a commercial building that is 50% or more energy efficient than a standard building can take a deduction of up to $1.80 per square foot. Partial credits are also allowed to the extent the building meets energy efficiency standards (25% to 50% greater) with respect to lighting, HVAC or window/doors, etc.

2) Hybrid Vehicles & Light Trucks/Fuel Cell Credits – The credits range from $250 to $4,000 for qualifying hybrid passenger vehicles and $1,000 to $4,000 for fuel cell motor vehicles.

3) Alternative Fuel Credits – The credits range from $2,500 to $4,000 for vehicles less than 8,500 pounds, up to $20,000 to $32,000 for vehicles with a gross weight of more than 26,000 pounds. Efforts are underway to allow similar state credits.
Other Federal Environmental Breaks:
– Geothermal or Solar Energy Property Credit ranging from 10% and 30% potential credits respectively;
– Advanced “ Lean Burn Technology” Vehicle credits ranging from $400 to $2,400 credits per vehicle;
– Certain shortened tax depreciable lives on pollution control equipment and current year “expensing” options for certain soil remediation costs.

While additional tax breaks are currently being considered at both the federal and state level, the aforementioned tax benefits should be fully evaluated by all taxpayers in order to implement the most environmentally friendly solutions in the most economically viable manner.

Those businesses that are leaning towards “doing the right thing”, but have economic concerns, will find these tax breaks to be very attractive and will often swing the pendulum in their favor for implementing the best long-term technology.