or business energy tax credit pass-through option
Post on 12-Jul-2015
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Acumen. Agility. Answers.
S T A T E & L O C A L T A X S T R A T E G I E S : B U S I N E S S I N C E N T I V E S A N D T A X C R E D I T S
In exchange, the pass-through partner makes a lump-sum
payment to the project owner. The pass-through partner
then claims the BETC against its own state tax liability.
The current pass-through payment rate (set by the DOE)
is 67 percent of face value for projects with a preliminary
certification before January 1, 2010, and 73.6 percent of face
value for projects with a preliminary certification thereafter.
A Significant Opportunity for Pass-Through PartnersBeyond its potential to deliver a high internal return rate,
there are a number of reasons that make a BETC an
attractive purchase:
• It can help diversify your investment portfolio.
• It gives you the opportunity to invest in renewable-energy projects.
• It reduces your total state income tax liability.
• It can lower your effective state tax rate.
Note that a BETC cannot be revoked once purchased. In
addition, the amount paid for a BETC is generally deducted
as state taxes over a five-year period.
Contact UsMoss Adams has the expertise to help you turn state and
local taxes into an opportunity for real savings. Discover how
we can help you benefit from this and other tax incentives. To
learn more, visit www.mossadams.com/services/taxservices/
salt. Or contact:
Robert A. O’Neill, Partner
(503) 478-2339
rob.oneill@mossadams.com
Businesses and organizations investing in energy-conservation, recycling, pollution-reduction, or renewable-energy projects are taking advantage of Oregon’s Business Energy Tax Credit (BETC). Yet in many cases these project owners lack Oregon tax liability, leaving them unable to reap the BETC’s full benefit in a timely manner.
Does your entity have Oregon tax liability? If so, you can
now purchase a project owner’s BETC—at a considerable
discount—and use it to help offset your own tax costs and
take advantage of an internal return rate that can exceed
20 percent.
Moss Adams LLP can help you leverage this opportunity,
known as the Pass-Through Option. We work with a number
of project owners that are interested in transferring their
BETCs (preferably in increments of $100,000), and we can
act as a qualified intermediary between you, the project
owner, and the Oregon Department of Energy (DOE) to find a
project that meets your Oregon tax needs. There’s no charge
to you for our assistance in helping you locate and secure a
suitable BETC.
About the BETCCreated in 1980 and expanded in subsequent years, the BETC
is an incentive program designed to encourage business
owners and organizations to initiate energy projects in return
for a tax credit of 35 percent. Certain projects—such as
those involving high-efficiency combined heat and power,
renewable energy resource generation, or renewable energy
resource equipment manufacturing facilities—are eligible for
a 50 percent credit. The BETC is taken over five years, with
an eight-year carryforward.
The Pass-Through OptionEntities with or without Oregon tax liability can “pass
through” their BETC for an eligible energy project to a
“partner”: a business or individual with Oregon tax liability.
Oregon Business Energy Tax Credit Pass-Through Option
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