In an effort to encourage individuals and businesses in various sectors to recycle as well as to conserve natural resources and energy, both the federal and local states have devised several forms of tax incentives.
To date, several recycling companies in more or less 25 states in the United States have been enjoying exemptions, rebates, tax refunds, tax credits, and even special depreciation allowances for properties used in the industry.
The importance of conserving energy as well as our natural resources, and of recycling, need not be stressed more. Nonetheless, people need to be constantly reminded that to recycle today means not only to save Mother Earth from further destruction, but also to make her well for our posterity.
For those of you unaware, who are doing everyone a favor simply by being contented with turning what would otherwise be waste products into valuable materials, thereby doing your part in preserving and protecting our environment and natural resources, your people as well as your government wish to give back in the form of tax reduction and exemption benefits.
Common forms of recycling tax incentives include the following:
A. Federal Tax Incentives:
The U.S. Internal Revenue Service allows a Property Depreciation Allowance for equipment and machinery used for recycling purposes. For qualified businesses, they can avail of a specific percentage of allowance for the depreciation of their property, provided, that:
- The allowance is availed in the first year that the property is serviceable;
- The property has an expected useful life of at least five years; and
- The property is used in the collection, management, processing, and distribution of recycled products and materials.
The Modified Accelerated Cost Recovery System helps recycling companies compute their property’s depreciation value.
B. State Tax Incentives:
- Sales, Income, or Property Tax Credits on the cost of recycling equipment purchased
- Sales or Real Property Tax Exemptions for the construction or improvement of the recycling company’s facilities
- Income Tax Credits for the recycling company’s employees
- Income Tax Credits for buyers of recycled products
- Tax Exemption for State Sales and Use Tax on some retail sales, leases, and rentals of goods and services availed by the recycling company
The U.S Environmental Protection Agency lists down the following 25 states enjoying Recycling Tax Incentives, and their qualifications: Arizona, Arkansas, Delaware, Florida, Georgia, Hawaii, Iowa, Idaho, Kentucky, Louisiana, Maryland, Minnesota, Montana, North Carolina, North Dakota, New Jersey, New Mexico, Nevada, Oklahoma, Oregon, South Carolina, Texas, Utah, Virginia, and Wisconsin. It must be noted, however, that depending on the state where your recycling business is located, there are some special qualifications and restrictions you need to comply with in order to avail of the tax privileges.
If you are a recycling company and you think you are qualified for a tax incentive, but are not enjoying any, you should start asking around for applicable tax incentive schemes in your local area. That should help you cut back on operational costs and expenses. But, what if you can save more? Here at National Utility Consulting, we can also help reduce your electric utility costs. Imagine just how much that would help you to earn and keep more profits, more than enough to sustain your operations. As avid supporters of recycling, we at National Utility Consulting most certainly like you to carry on.