Tax Legislative Update: A Green Energy Bill in the Tax Code?

The Growing Renewable Energy and Efficiency Now (GREEN) Act is in the early stages of development. Recently, the House Ways and Means Committee released a discussion draft aimed at promoting green energy for both individuals and businesses. It details the energy priorities of the majority–mostly investing in renewable energy and reducing carbon emissions. 

On the business side, the GREEN Act would extend certain renewable energy tax incentives, provide new tax incentives for investing in a green workforce, and encourage the use of zero-emission vehicles. In other words, it’s a potential game-changer for the way you do business. 

It’s only in phase one, however, with climate change continuing to be a hot topic and an election year upon us, we think this kind of bill might come to the forefront. And if it gains traction, it could have a big impact on your company’s overall tax strategy for 2020. 

Current Energy Saving Tax Incentives 

If you have a stake in the energy sector or you are simply an energy-conscious businessperson, you’ll want to keep your eye on the GREEN Act. In the meantime, there are other tax-saving opportunities available. 

  • Business Energy Investment Tax Credit: This credit applies to solar and large wind projects, and the savings could be substantial. If you started construction in 2019, your credit is 30 percent for solar and 12 percent for wind. These percentages will be phased out over time with next year’s solar credit set at 26 percent and the wind credit’s renewal in question. 
  • Section 179 and Bonus Depreciation: This one can apply to many different areas of your business. You might already know that if you purchased office equipment, machinery, computers, or vehicles, you can deduct the full amount this year. It also applies to all other “business equipment” like a new, energy-efficient HVAC system, interior lighting, or hot water system. Other equipment that reduces your power use may also qualify. Check with your tax professional at Naden/Lean  for a full breakdown. 
  • Outdated electronics can be donated for a tax break. They must go to a reputable company, and be sure to get a receipt. 

What to Expect in 2020 

It’s hard to know what to expect in 2020. The end-of-year spending legislation that passed through the House on December 17, 2019 doesn’t prioritize green energy, which leaves many energy tax incentives up in the air. They may be renewed retroactively or expire at the end of the year. 

Naden/Lean pays close attention to legislative developments that might affect your tax strategy. So, if you are considering moving toward a more energy-efficient workplace in the future, contact us to talk about the tax incentives that may be available.