Have you ever heard, “I am from the government, and I am here to help you”? That usually sends chills down the spine. Well, federal and state offices may provide incentives, tax breaks and technical assistance of which bakery and snack operations should take advantage.
The Obama Administration’s pending budget for fiscal year 2011 includes a provision that offers incentives to reduce buildings’ energy use by 20% by 2020, put 1 million electric vehicles on the road by 2015 and double the share of electricity from clean energy sources by 2035. The program will be paid for by the elimination of 12 tax breaks to oil, gas and coal companies. I hope these incentives will appear in the final package.
At the end of 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The legislation temporarily allows businesses to expense 100% of certain investments such as equipment purchases in 2011. The equipment must be purchased after Sept. 8, 2010, and placed in service before Jan. 1, 2012, or Jan. 1, 2013, for certain property. New mixer or oven, anyone?
ENERGY EFFICIENCY. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings, applicable to qualifying systems and buildings placed in service from Jan. 1, 2006, through 2013.
A tax deduction of $1.80 per sq ft is available to owners of new or existing buildings who install interior lighting; building envelope; or heating, cooling, ventilation or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison with a building meeting minimum requirements set by American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 90.1-2001.
Deductions of 60¢ per sq ft are available to owners if the projects meet target levels that would reasonably contribute to an overall building savings of 50% if additional systems were installed. The deductions are available to building owners and to tenants who pay for the work.
To measure energy use for the tax deduction or for business efforts to cut costs, the Energy Star program of the Environmental Protection Agency (EPA) has some excellent tools to benchmark and track energy use. Forms have been developed, and guidance on how to use them is clear. The site is not easy to use, but it is manageable. Also, EPA joined with four other federal organizations to develop the E3: Economy, Energy, Environment program, which combines lean practices and sustainability. (For more on sustainability, see "Sustainable practices take companies from red to green").
To find federal and state energy opportunities go to the Department of Energy Database of State Incentives for Renewables and Energy Efficiency website, www.dsireusa.org. For example, click Texas on the state map to note that companies are permitted to deduct 10% of the amortized cost of solar and wind systems from their apportioned margin of the corporate tax. Click on Kentucky, and note that the Kentucky Utilities Co. offers rebates up to $50,000 on lighting measures, sensors, air conditioners, heat pumps, motors, pumps, variable frequency drives, chillers, chilled water resets and thermal storage systems. California, Connecticut, New York and South Carolina offer incentives for the use of fuel cells. Although some of the state information is out of date, you can still get the name of an office and see if a program has been reauthorized.
- Department of Energy Database of State Incentives for Renewables and Energy Efficiency
- Department of Labor Employment and Training Administration
- Economic Development Administration
- E3: Economy, Energy, Environment
- EPA Energy Star Program
- Internal Revenue Service
- Small Business Administration
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