As states offer more and more renewable energy tax incentives, small businesses are seeking to take advantage of the situation by getting into the renewable energy business. But, depending on the business’ location, the difference between each state’s incentives can be dramatic.
For example, a small solar energy business headquartered in Virginia does most of its installments in Maryland, where there are several solar energy incentives available, according to an article in the LortonPatch. In fact, 90 percent of the company’s installations are done in Maryland due to the incentives available there, the article noted.
Maryland offers seven solar-related tax incentives, according to according to Bloomberg BNA’s Green Incentives Navigator. The incentives include sales tax exemptions, property tax exemptions, and income tax credits related to solar energy. Maryland’s solar energy grant program provides grants of up to $10,000 to install solar energy equipment on residential and business property.
The amount of tax expenditures for Maryland’s corporate solar water heating tax credit during FY 2010 was $0.1 million and, for the state’s solar energy grant program, was $1.5 million. The sales tax exemption for solar energy equipment added up to $0.2 million in FY 2010, according to Maryland’s Tax Expenditures Report.
In Virginia, however, there are very limited solar incentives available to taxpayers. Specifically, Virginia offers a green job creation tax credit and a solar manufacturing incentive grant program, according to according to Bloomberg BNA’s Green Incentives Navigator.
In order to remedy the situation, small business owners are lobbying the state legislature to get more renewable energy legislation passed that will help taxpayers financially and encourage them to invest in renewable energy. Part of the reason that more incentives are not available for solar energy in Virginia is that electricity is inexpensive, the LortonPatch article noted.
Perhaps more small businesses will come together to form a sort of grassroots clean energy movement, which will lead to states being more motivated to pass additional renewable energy incentives in the future.
In other developments . . .
Alabama enacted a new markets tax credit for community development, according to a recent Bloomberg BNA Weekly State Tax Reportarticle by State Tax Law Editor Denise Ryan. The credit is similar to the new market tax credit under I.R.C. § 45D and can be taken against the corporate income, individual income, insurance premiums, and financial institutions taxes for qualified equity investments in a qualified community development entity.
By: Kathleen Caggiano
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).