In these difficult economic times, it can be a struggle to maintain smooth operations of a small business, never mind starting a small business from the bottom up. For this reason, many project managers and business owners are looking for ways to cut costs without putting the quality of their services and products at risk. Fortunately, one avenue for minimizing taxes, securing additional funding, driving up profits, and reducing overhead costs is to utilize energy efficient resources and technology. However, your company is responsible for the effort of seeking out these programs and taking advantage of the benefits they offer. You will see not only greener operations drive up your profits – but you can look forward to rewards in terms of reduced energy use, more efficient utilization of your raw materials and resources, and even rewards from relatively sizeable tax incentive.
Tax Incentives: Why it Pays – Sometimes – To Go Green
Eco-friendly business practices are often rewarded by tax breaks from the government, such that there is a refund in the form of a lump sum, or a reduced rate from the point of initial filing. In other words, a tax incentive allows the government, whether at the state or federal level, to promote a particular business, option, or behavior that has benefits for their fellow citizens and their surrounding environment. The United States government sees that, as electricity and other resource uses are on the rise across industry fields, it is important to incentivize the implementation of new technologies and methods – especially the ones developed within the last twenty years – that severely reduce energy use over a long-term basis.
Federal Tax Incentives: High Rewards for Energy Efficient Machinery
As you consider the options available for your business, first review the Federal Investment Tax Credit, which provides a whopping 30 percent credit or rebate to either individual citizens, or taxable entities such as businesses and corporations, who have installed new renewable energy systems. The credit is also available for those who have installed these systems in recent years, and a tax professional can provide advice on filling out paperwork to take advantage of this opportunity while it is still provided at the federal level. In addition, the federal government also provides fantastic opportunities for those who are operating within particular regions of the country that face the threats of natural disasters, or who have proven to be financially hit the hardest during the recent economic downturn. Thorough research and consultation with government representatives who provide outreach to businesses looking to utilize new eco-friendly technologies, you can determine which opportunities apply to you and your business.
State and Municipal Incentives: Tax Cuts, Rebates, Grants, Loans, and Sponsorship
As with federal level tax incentives, it is difficult to put an exact dollar amount on what can be saved using green technology incentives at the state and municipal level – especially since it is more diverse. In California, there is an incredible amount of incentive programs and tax breaks for both individuals and businesses who are interested in them. For example, there are over fifteen programs and cuts available for those who implement solar power into their home or business, and several tax cuts, building fee waivers, and grants available for implementing green construction practices in your renovations. The Feed-In Tariff is one of many performance-based incentives that promote energy-efficient practices in California.
The only surefire way to know whether or not there are programs that fit your company’s needs is to speak with a tax professional about the current programs available within your state, your general region, and even within the federal system. Specialists will be able to let you know of the tax breaks that are in place, and the specific details involved in meeting their requirements by particular deadlines. After all, the list of incentivized opportunities within the eco-friendly field are ever-changing, and it is important to fully understand your company’s risks and responsibilities before you begin the costly period of purchasing and installing new eco-friendly equipment. Additional consultations with an outreach officer from your local or state governmental offices might help you to learn about the specifications involved with other grant and loan support programs that provide incentivization and assistance within your particular field. Finally, reach out to the utility companies that your company partners with – they might offer a match program or discount for small business owners looking to implement more environmentally-friendly practices.
This article is a guest contribution by Georgia Webster. Georgia is a freelance writer and blogger with a real passion for all things green related. When not behind the screen, Georgia likes to do extreme sports, her favorite one is windsurfing and wakeboarding. You can contact her via G+.