subject: Tax Breaks For Saving Energy [print this page] Most states and local governments have some sort of tax break for these types of items and the best part is that local tariff incentives can be used in addition to federal levy breaks. Some programs are very specific and can differ widely, but local tariff breaks usually come in three main types, including sales exemptions, income tax credits or deductions, and property rebates or exemptions.
Incentives offered through state utility authorities are also very common. Several states and localities have corporate tariff installments and deductions for investments in renewable energy and green building.
Some cities offer an income levy installment for businesses who invest in renewable resources, conservation, or the manufacture of renewable energy resource equipment. The amount of the manufacturing installment can be quiet large, up to a maximum of $40 million for each phase of development.
Some cities have a non-residential solar and wind tariff lien for up to $25,000 per building or $50,000 total. Others also have an income tax installment for renewable energy systems, for both residential and commercial systems.
The residential installment can be claimed for a maximum of $2,000 and the commercial credit can be claimed for 10 percent of the investment up to a maximum of $50,000. In addition to state tax incentives for green construction, many cities waive permit fees or accelerate the approval process for the construction of sustainable buildings.
Income tariff installments for going green are available in 22 states. Some have a refundable lien for efficient home improvements or appliances purchased for use in a taxpayers primary residence that they own.
The credit is for ten percent of the purchase price with a maximum of $150. You can also get a levy installment for electrical efficient home improvements for residents who are either home owners or renters.
The lien can be taken for up to 25 percent of net purchase costs for appliances, solar panels, air conditioning and heating systems, and more. Many cities specifically exempt purchases of efficient products or renewable electricity equipment.
Some sales of equipment used to generate electricity using fuel cells, wind, sun, biomass, tidal or wave energy, geothermal, anaerobic digestion or landfill gas are not taxed at all. In other areas products purchased for the design, manufacture, production, or assembly of renewable energy equipment, combined heat and power equipment, and alternative transportation equipment are not subject to sales or use taxes.
Some states also have special sales tariff holidays for purchases of Energy Star appliances. Property levy exemptions for renewable energy can be found in 32 states.
Many tariff installments, especially those for green construction, require that you apply for the credit, rebate, or exemption before you begin the project. And some tax incentives have a specific budget cap and once that is met, no more installments are given out.
This makes an applying early especially important. Even most appliance rebates require an application prior to purchase.
So, check with your state tariff authority or department of energy for details on incentives before you start. Equipment including solar panels, solar-powered water heaters, geothermal heat pumps, photovoltaic systems, small wind systems, and fuel cells are eligible for a 30 percent levy lien with no maximum tariff credit amount.
You can install solar panels, solar water heating equipment, or a fuel cell power plant to their homes in the United States. In general, a qualified fuel cell power plant converts a fuel into electricity using electrochemical means, has electricity, and generates at least 0.5 kilowatts of electricity.
The tariff installment amount is 30 percent of the cost, with no maximum on the total levy lien amount.
Tax credits are available for many types of home improvements including high efficiency heating equipment.
Before you buy a new water heater, you need to see if yours qualifies for a tax installment. The maximum amount of homeowner credit for all improvements combined is $500 during the two year period of the tax credit.
