As a business owner, you likely take your responsibility to the environment seriously. You don’t want to damage the community you live and work in by creating a major source of pollution and waste through your line of work as this could not only disrupt the ecosystem, but also impact your family and the many local consumers that support you and keep your business running. Further, causing harm to the environment can be a major detriment to your brand image in this day and age, when it seems like everyone is hopping aboard the eco-friendly bandwagon. On the other hand, adopting green standards and practices could be very costly for a small business that is struggling to get by. Luckily, the federal government (along with many state governments) offers tax incentives to help business owners that want to do their part to meet and exceed environmental standards. Even Canadian provinces are finding ways to offer tax incentives, so keep that in mind, especially if you use tax preparation software to file for taxes. Being green is catching on, and it might just be beneficial for you to jump on the green bandwagon.
On the federal level, you can secure tax incentives for energy efficiency in a number of ways. First, you can receive a tax deduction of $1.80 per square foot if you build or purchase a space that meets set standards for energy efficiency. This includes reducing energy usage by 50% or more through proper lighting, water, HVAC systems, and other measures. You will have to receive certification in order to qualify for this deduction, but considering how much it can save you at tax time, it’s well worth looking into the process.
You may also be eligible for a 10-30% tax credit if you use alternative energy on your property (solar, wind, water, and/or geothermal), you can get breaks for reusing and recycling (qualified property, machinery, equipment, etc.), and using fuel efficient, alternative fuel, or hybrid and electric vehicles for your business can also deliver significant tax credits, depending on the type of vehicle and how many you add to your fleet. And of course, companies that build homes or manufacture specific goods (appliances or biofuels, for example) may be eligible for targeted industry incentives as well.
But that’s not all. Your state may also provide additional incentives to encourage and even help small businesses to cut waste and pollution, conserve energy and water, and go green for the good of the local community. This could include tax incentive programs aimed at helping to finance projects that are eco-friendly. Florida, for example, has incentives in place to encourage businessesto use renewable energy sources, with a tax exemption for those that utilize alternative energy for their property, equipment, and machinery. Considering that Florida is the sunshine state, it’s not surprising that they lean towards solar energy.
You likely have plenty of costs to consider as a business owner, from employees to materials to contents insurance for tenants (if, like most small businesses, you lease a building). You shouldn’t also have to worry about the cost of going green. Luckily, it seems that the government is taking the decline of the environment seriously enough to pass along incentives to businesses like yours. So don’t hesitate to take advantage of these financial savings so that you can do your part to save the Earth.