Dear Business & Industry Partners,
In previous editions of “Climate Trends,” we mentioned that the Inflation Reduction Act (IRA) was signed into law. It includes nearly $369 billion in climate and clean energy provisions in the new law highlighting grants and tax credits that will bring down emissions and provide businesses with the incentives they need to make long-term investments in clean energy. There are two ways businesses can take advantage of the IRA grants and tax credits which are through direct development in clean energy sectors and as clean energy consumers. Businesses from the construction, industrial, and manufacturing sectors are sought to develop clean energy projects and related infrastructure.
There are at least three key provisions that are of interest to businesses which include, new corporate tax credits related to clean electricity, fuel, manufacturing, and vehicles, research and development tax credits, and investment in technologies manufactured in America such as batteries, solar panels, and wind turbines. Businesses that may not be in the targeted sectors can take advantage of the tax credits to switch over to clean energy since the IRA also incentivizes these transitions to low cost solar and electric vehicles.
The work of the Department of Environment and Sustainability (DES) is focused on finding solutions that reduce greenhouse gas (GHG) emissions, improve air quality, protect endangered species, and create a more resilient community through agency policy and guidance, community input, and cooperative partnerships. You can support these efforts by staying up to date with All-In Clark County Initiatives, spreading awareness by forwarding these articles to your networks, and following us on social media. As always, thank you for your attention to these issues and we hope that you find these articles informative.
Sr. Planner – Strategic Partnerships
Clark County Department of Environment and Sustainability
Available Tax Credits for Businesses
The following shows some of the incentives available to businesses doing business in the clean energy industries or related development industries, and incentives as consumers.
Research and Development Tax Credit: The IRA more than doubles the amount a qualified business can potentially claim as a research and development (R&D) tax credit to offset its payroll tax for tax years starting after 2022 — to a maximum of $2.5 million over five years. Qualifying research expenses include wages for employees involved with the research, supplies to conduct it and amounts paid for the use of computers. They also include 65% of the amounts paid or incurred for contractors.
Renewable Electricity Production Tax Credit: The federal renewable electricity production tax credit (PTC) is for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year.
Business Energy Investment Tax Credit (ITC): The IRA established new wage and apprenticeship requirements for larger systems to qualify for a 30% tax credit.
Qualified Commercial Clean Vehicle Tax Credit: The IRA established a tax credit for qualified commercial clean vehicles purchased on or after January 1, 2023. The tax credit is worth 30% of the cost, up to $7,500 for vehicles less than 14,000 pounds, or $40,000 for mobile machinery.
Energy-Efficient Commercial Buildings Tax Deduction: Tax deductions are available to owners of new or existing buildings who install energy and water efficient systems.