Our Sustainability Team:
Tim Kalberg Tax Shareholder
Kimberly Woodside Tax Shareholder
Pati Schmitt Audit Shareholder
As the greenist city in America*, Portland has always been on the forefront of sustainable business practices. It's about time the federal and state government started supporting the effort. Over the past few years, the quantity of green tax incentives has ballooned, offering businesses the opportunity to reduce tax liability, increase current cash flow and help offset the cost of energy efficient improvements. Navigating these incentives can be tricky - and time consuming - which is why we've created a database of over 100 federal, state and local energy tax incentives to match you and your business to applicable credits and deductions. We can work with you to create a custom listing of incentives based on your situation. In the meantime, take a look at these common scenarios and the incentives that may apply:
Commercial Real Estate Residential Real Estate Homeowners - Federal Incentives Homeowners - Oregon Incentives Vehicles
*according to Popular Science, www.popsci.com, February 2008
Frequently Asked Questions
How do I get these incentives? How do I tell whether something is a credit or a deduction? What's the difference? Will the federal credits help me if I am paying Alternative Minimum Tax (AMT)? Can I get a credit and take a deduction on the same property? What other non tax incentives are out there? I don't owe Oregon income tax. Can I still benefit from Oregon credits? Can I take my Oregon tax credits all at once? What is biomass? What counts as an alternative fuel?
How do I get these incentives? Green tax incentives fall into two basic categories: credits or deductions you need to apply for before you start your project, and credits or deductions you can apply for during or after your project. Every incentive has a link to a web page that includes the details on all the steps you'll need to take and forms you'll need to complete. As always with tax-related forms, Perkins is here to help. Back to top
How do I tell whether something is a credit or a deduction? What's the difference? It's a credit (may be used to offset your tax liability dollar for dollar) unless we specifically described it as a deduction (in which case it goes on your tax return like any other deduction).Back to top
Will the federal credits help me if I am paying Alternative Minimum Tax (AMT)? In general, federal tax credits do not reduce AMT liability. In 2009 and 2010 however, many of the green incentives enacted or extended by Congress specifically allowed the credit against AMT. When a credit can be used against AMT, we've made a note of it in the credit description.Back to top
Can I get a credit and take a deduction on the same property? It depends. In general, you might be able to get a state credit and a federal deduction, or vice versa, for your $10,000 of green improvements, but not both a state credit and state deduction or both a federal credit and federal deduction based on the identical $10,000. We recommend you consult your tax advisor to determine the proper treatment in your particular circumstance.Back to top
What other non tax incentives are out there? If you do something that saves energy, we recommend you scan your utility provider's website and the Energy Trust of Oregon website to see if you qualify for additional incentives. Helpful links: Northwest Natural Gas PGE Energy Trust of OregonBack to top
I don't owe Oregon income tax. Can I still benefit from Oregon credits? No Oregon income tax liability? No problem! S-corps, partnerships and LLCs can pass through Oregon credits to their shareholders, partners or members. Your business or nonprofit can also elect into the Pass Through Option, and sell your credit to a friend or associate at a price established by the Oregon Department of Energy. If you don't know anyone who'd like to buy your credit, the Department of Energy can help you find someone. (You should check in with your tax and legal advisors before finalizing any agreements involving the Pass Through Option.) Click here for full details on the Pass Through Option. Back to top
Can I take my Oregon tax credits all at once? Individual tax credits can be taken in a single year and if your total credits exceed your tax liability, may be carried forward up to five years. Business credits are taken over five years unless total eligible project costs are $20,000 or less, in which case the credit may be taken in one year. Unused business credits may be carried forward up to eight years. If you had $100,000 in eligible project costs, you’d be able to take your business energy tax credit as follows: Business Energy Tax Credits - Project Cost % ($ amount)
| Conservation credit 35% ($35,000 ) | Renewable credit 50% ($50,000) | |
| Year 1 | 10% ($10,000) | 10% ($10,000) |
| Year 2 | 10% ($10,000) | 10% ($10,000) |
| Year 3 | 10% ($10,000) | 10% ($10,000) |
| Year 4 | 5% ($5,000) | 10% ($10,000) |
| Year 5 | 5% ($5,000) | 10% ($10,000) |
What is biomass? For an in-depth definition, visit the Oregon Department of Energy Biomass headquarters. In short, "Biomass is the organic matter in trees, agricultural crops and other living plant material." Biomass energy sources include stuff you can burn (wood pellets, charcoal, etc.), as well as biocrude, methane, ethanol, biodiesel, and methanol. Back to top
What counts as an alternative fuel? If you're fueling your vehicle or business equipment with something other than standard unleaded gasoline, it's worth seeing if you qualify for alternative fuel incentives. Visit the Oregon Department of Energy Alternative Fuel headquarters for the details.Back to top