Not only is Texas a leading provider of crude oil and natural gas, but the state’s abundant sunlight and persistent winds offer businesses yet another opportunity to lead the nation by tapping renewable energy sources to power manufacturing plants, distribution centers and office buildings.

But despite the fact that Texas companies can leverage more than 80 federal, state and local incentive programs to defray the cost of purchasing and installing renewable energy systems and energy conservation equipment, executives in the Lone Star state are still leaving money on the table.

“Renewable energy and conservation incentives and credits allow companies to demonstrate environmental stewardship, increase operating efficiencies, and lower income taxes by defraying the cost of purchasing renewable energy and energy conservation equipment and systems,” says Laura Roman, CPA, CMAP, a partner in tax and strategic business services at Weaver. “Unfortunately, the funds often go unused, and the programs won’t last forever.”

Smart Business spoke with Roman about the opportunities to lower taxes and operating expenses and positively impact the environment by taking advantage of underutilized conservation and renewable energy credits and incentives.

Why should companies consider switching to renewable energy or energy efficient building materials?

The benefits include the opportunity to lower energy consumption and utility bills by installing modern, energy-efficient manufacturing equipment, windows or HVAC systems, and the chance to promote a positive public image by launching green initiatives and supporting environmental stewardship. Plus, both tenants and building owners can utilize the incentive programs and reap the financial rewards. For example, the improvements help owners by boosting property values, while tenants benefit from increased energy efficiency, which ultimately reduces operating costs.

What types of incentives are available?

There are more than 54 federal and 28 state and local programs that can be used for equipment purchases or upgrades that reduce energy consumption or utilize solar, wind, ethanol and biodiesel energy. The programs include tax deductions, credits and exemptions, loans and grants, rebates and performance-based incentives. For example, Texas businesses can qualify for commercial energy efficiency rebates, energy-efficient incentive programs, green building corporate tax credits and sales tax exemptions for purchasing energy and water efficient products. While the U.S. Treasury Department offers renewable energy grants for projects involving solar photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal, municipal solid waste, CHP/cogeneration, solar hybrid lighting, hydrokinetic, tidal/wave energy, and ocean and fuel cells using renewable fuels or micro turbines.

Best of all, executives don’t have to commandeer large amounts of cash to complete the projects because companies can tap different programs to train employees, purchase equipment or pay for installation contractors. So, companies can still invest in that much-needed marketing program or software upgrade if they utilize renewable energy incentives and credits to hire renewable energy specialists, replace inefficient manufacturing equipment or install a new HVAC system.

How do the incentives provide financial benefits?

Essentially there are five areas where companies benefit from renewable energy incentives and tax credits.

  • Gross income exclusions. Companies can deduct the full amount of incentive payments or grant funds they receive for qualified renewable energy or energy conservation projects from gross income.

  • Dollar-for-dollar deductions. There are no sliding scales or phased-out deductions. Companies can use every dollar they invest in qualified renewable energy and energy conservation projects to reduce their tax liability.

  • Accelerated depreciation. Under IRS Section 179D, companies can depreciate the cost of purchasing new plant and energy equipment at a faster rate than typically allowed. So, instead of taking 39 years to recover the cost of a new lighting, HVAC system or building envelope, the owner of a 100,000-square-foot building can deduct up to $1.80 per square foot, or up to $180,000 in the first year.

  • Ancillary funding and allowances. Funding is available to hire specialized workers or train current employees on the use of renewable energy equipment and processes.

  • Multiple opportunities. Companies can tap multiple incentives for each project including loans, performance-based incentives, deductions, tax exemptions and grants, as well as property and sales tax rebates.

Should executives be aware of any special qualifications or rules?

The incentive plans and tax codes are fairly straightforward, but there’s no need to spend hours interpreting the criteria or deciphering nebulous clauses when a tax professional is intimately familiar with the nuances of each program. At the same time, he or she may help identify additional opportunities to complete the project without tapping cash reserves, and can often share tips and ideas from experience helping other companies navigate the process.

How can executives evaluate the ROI and choose the most advantageous projects?

Companies should discuss ideas and energy needs with architects, contractors and energy professionals so they can create a list of feasible projects and determine the material and labor cost for the various improvements. Review the list with an accountant, since he or she is familiar with the tax code and incentives and can provide an estimate of the cash outlay and ROI. Finally, act now. Remember, it costs virtually nothing to investigate these opportunities, and there’s no sense in waiting when the money to complete renewable energy or energy conservation projects is there for the taking.

Laura Roman, CPA, CMAP, is a partner in tax and strategic business services at Weaver. Reach her at (432) 570-3030 or Laura.Roman@weaverllp.com.

Insights Accounting is brought to you by Weaver

Published in Dallas

On April 24-26, Corporate College will bring the nation’s best legal and technology experts to Northern Ohio. There will be multiple continuing legal education (CLE) sessions offered each day, so attendees can earn all of their annually required CLE credits at one time, in one place. Plus, the latest in legal and technology-related products and services will be presented at the accompanying trade show.

Julie Savarino, managing director of Business Development Inc., will be presenting two nationally acclaimed sessions: “Mastering the ‘Sales’ Process for Lawyers,” and “Secrets of Success from Leading Women Lawyers.”

“Law is a practice, you have to practice constantly. If you want to maximize your strengths and further your career, these are great programs to attend,” says Savarino.

Savarino is an attorney and a nationally renowned expert in client and business development for lawyers and law firms. Throughout her 25 years of practice, she has helped thousands of lawyers and firms generate millions of dollars in new business through her nationally renowned training, coaching and consulting services.

Smart Business spoke with Savarino about the Continuing Legal Education Summit, who should consider attending the event and what types of sessions are available.

What is the purpose of the Continuing Legal Education Summit?

The purpose is to pull together an exciting roster of CLE programs. Some of the best CLE sessions in the country will be offered at one time, under one roof.

In addition to the programs, I’m also very excited about the location. Corporate College is an undiscovered jewel. It is a great venue, with beautiful property and excellent meeting facilities.

Who should consider attending the event?

Professionals who should consider attending include attorneys, legal marketers, legal administrators and IT directors from Ohio, Pennsylvania, Indiana, Illinois and West Virginia. The summit also will be beneficial for court reporters and paralegals because they need CLE as well.

What will the ‘Mastering the “Sales” Process for Lawyers’ workshop consist of?

‘Mastering the “Sales” Process for Lawyers’ is a workshop designed to help lawyers become the best rainmakers they can be. It is a full day and an exciting day. In the morning we cover the six key steps in the sales process for lawyers, which is very different than the sales process for typical business entities because of the ethical rules attorneys must abide by and the relationship foundation of the legal business.

A key feature of the afternoon portion of the workshop is the two in-house counsel who serve as instructors. During the afternoon, participants prepare for and have the opportunity to ‘pitch’ the two in-house counsel while gaining their direct, candid and invaluable feedback. This doesn’t happen in real life. In real life when you pitch them, you leave the room and they talk about you behind your back. The workshop provides the opportunity to gain feedback about your approach, your skill set, and where you might want to enhance your techniques. It is somewhat comparable to lawyers actually listening in on jury deliberations at trial — which of course is not allowed.

This program has been delivered hundreds of times around the country and achieved excellent results for law firms and lawyers.

How can participants benefit from the sales workshop?

Lawyers don’t learn the steps of the sales process in law school. We have a prohibition against solicitation. There’s a phrase called ‘ambulance chasing’ which we can’t do. We can advertise to some degree, but you can’t call someone and ask for their business — solicitation is prohibited in all 50 states. This is one-stop shopping for learning how to ethically and appropriately sell.

How would you describe the ‘Secrets of Success from Leading Women Lawyers’ program?

‘Secrets of Success from Leading Women Lawyers’ will feature a panel of successful women lawyers employed in various capacities. This will be an outstanding program because the panel of women lawyers comes from various sectors. Not all practice at law firms; some practice in the public sector, some in education. The fact is that women lawyers — just like women businesspeople across the country — are still not equally paid or equally rewarded for their work. The women on the panel are going to share some of the secrets to their success.

Why should women consider attending this session?

Parity is still a struggle for most women lawyers no matter where they work and this panel is designed to share tips and techniques on how to fuel their career. For example, one panelist is a lawyer who works as in-house counsel at American Greetings and another is an up-and-coming young woman lawyer from a large law firm.

It’s very hard to be a successful woman lawyer. It’s a very demanding profession and law is a jealous mistress. To have children, a family, a life and be a successful lawyer is challenging and difficult. This program is going to showcase that there are a lot of alternative career paths, not simply working at a law firm and billing 2,000 hours a year.

Julie Savarino is managing director of Business Development Inc. Reach her at (734) 668-7008 or Julie@BusDevInc.com. To register for the CLE Summitt, visit www.corporatecollege.com/cle or call (866) 933-5167.

Published in Cleveland

Not only is Texas a leading provider of crude oil and natural gas, but the state’s abundant sunlight and persistent winds offer businesses yet another opportunity to lead the nation, by tapping renewable energy sources to power manufacturing plants, distribution centers and office buildings.

But despite the fact that Texas companies can leverage more than 80 federal, state and local incentive programs to defray the cost of purchasing and installing renewable energy systems and energy conservation equipment, executives in the Lone Star state are still leaving money on the table.

“Renewable energy and conservation incentives and credits allow companies to demonstrate environmental stewardship, increase operating efficiencies and lower income taxes by defraying the cost of purchasing renewable energy and energy conservation equipment and systems,” says Laura Roman, CPA, CMAP, partner in tax and strategic business services at Weaver. “Unfortunately, the funds often go unused, and the programs won’t last forever.”

Smart Business spoke with Roman about the opportunities to lower taxes and operating expenses and positively impact the environment by taking advantage of underutilized conservation and renewable energy credits and incentives.

Why should companies consider switching to renewable energy or energy efficient building materials?

The benefits include the opportunity to lower energy consumption and utility bills by installing modern, energy-efficient manufacturing equipment, windows or HVAC systems, and the chance to promote a positive public image by launching green initiatives and supporting environmental stewardship. Plus, both tenants and building owners can utilize the incentive programs and reap the financial rewards. For example, the improvements help owners by boosting property values, while tenants benefit from increased energy efficiency, which ultimately reduces operating costs.

What types of incentives are available?

There are more than 54 federal and 28 state and local programs that can be used for equipment purchases or upgrades that reduce energy consumption or utilize solar, wind, ethanol and biodiesel energy. The programs include: tax deductions, credits and exemptions, loans and grants, rebates and performance-based incentives. For example, Texas businesses can qualify for commercial energy efficiency rebates, energy efficient incentive programs, green building corporate tax credits and sales tax exemptions for purchasing energy and water efficient products. While the U.S. Treasury Department offers renewable energy grants for projects involving: solar photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal, municipal solid waste, CHP/cogeneration, solar hybrid lighting, hydrokinetic, tidal/wave energy, and ocean and fuel cells using renewable fuels or micro turbines.

Best of all, executives don’t have to commandeer large amounts of cash to complete the projects because companies can tap different programs to train employees, purchase equipment or pay for installation contractors. So, companies can still invest in that much-needed marketing program or software upgrade if they utilize renewable energy incentives and credits to hire renewable energy specialists, replace inefficient manufacturing equipment or install a new HVAC system.

How do the incentives provide financial benefits?

Essentially there are five areas where companies benefit from renewable energy incentives and tax credits.

  • Gross income exclusions. Companies can deduct the full amount of incentive payments or grant funds they receive for qualified renewable energy or energy conservation projects from gross income.
  • Dollar-for-dollar deductions. There are no sliding scales or phased-out deductions. Companies can use every dollar they invest in qualified renewable energy and energy conservation projects to reduce their tax liability.
  • Accelerated depreciation. Under IRS 179D, companies can depreciate the cost of purchasing new plant and energy equipment at a faster rate than typically allowed. So, instead of taking 39 years to recover the cost of a new lighting, HVAC system or building envelope, the owner of a 100,000-square-foot building can deduct up to $1.80 per square foot, or up to $180,000 in the first year.
  • Ancillary funding and allowances. Funding is available to hire specialized workers or train current employees on the use of renewable energy equipment and processes.
  • Multiple opportunities. Companies can tap multiple incentives for each project including loans, performance-based incentives, deductions, tax exemptions and grants, as well as property and sales tax rebates.

Should executives be aware of any special qualifications or rules?

The incentive plans and tax codes are fairly straightforward, but there’s no need to spend hours interpreting the criteria or deciphering nebulous clauses when a tax professional is intimately familiar with the nuances of each program. At the same time, he or she may help identify additional opportunities to complete the project without tapping cash reserves, and can often share tips and ideas from experience helping other companies navigate the process.

How can executives evaluate the ROI and choose the most advantageous projects?

Companies should discuss ideas and energy needs with architects, contractors and energy professionals so they can create a list of feasible projects and determine the material and labor cost for the various improvements. Review the list with an accountant, since he or she is familiar with the tax code and incentives and can provide an estimate of the cash outlay and ROI. Finally, act now. Remember, it costs virtually nothing to investigate these opportunities, and there’s no sense in waiting when the money to complete renewable energy or energy conservation projects is there for the taking.

Laura Roman, CPA, CMAP, is a partner in tax and strategic business services at Weaver. Reach her at Laura.Roman@weaverllp.com or (432) 570-3030.

Published in Dallas

Change happens. Are you making the most of it? Are you considering relocating your business or hiring employees? What about diving into research and development, or purchasing new, more efficient equipment to improve manufacturing processes?

If you are thinking about these or any other business-related initiatives, tax credits and incentive opportunities could have a significant impact. You may also be eligible for grants, low-interest financing or reduced utility costs, says Shawndel Rose, manager of State and Local Tax, Brown Smith Wallace LLC, St. Louis, Mo.

“Credits and incentives have been around for years, but as the economy changes, so does the nature of these opportunities. The financial position of the state you live in is impacted right along with your business, so why not make use of these tax opportunities while continuing to grow and develop your business,” says Rose.

Smart Business spoke with Rose about how tax credits and incentives work and what businesses can expect this year in light of the economy.

How do tax credits and incentives work for businesses?

Credits and incentives work in a number of ways for businesses. One way is to encourage economic development in the state. For example, many states encourage businesses to invest in new property or machinery and equipment. Relocating operations, expanding current operations and job creation are other focus areas.

Some of the most beneficial credits and incentives are based on maintaining or increasing a business’s work force.

A second way they work is to induce businesses to engage in certain activities, such as research and development and ‘going green.’ Oftentimes, they encourage businesses to relocate operations to a distressed or revitalization area.

Job training to increase employee skills and help develop the state’s work force is another encouraged activity. There are also rewards for hiring employees who may belong to a protected class, such as veterans or those considered difficult to employ.

As you can see, there are a host of opportunities to encourage business growth and to expand and enrich business operations while reducing your tax burden and, ultimately, saving money.

What is the difference between a credit and an incentive?

Credits are statutory and are designed to encourage specific activities. They can be based upon payment of other taxes. For example, if a business pays sales tax or property tax, it could generate a credit to be used to offset an income tax liability.

It’s important to know that some credits require preapproval from the government agency awarding the credit. Credits are typically claimed on a taxpayer’s state or local income, franchise, or net worth tax return and may be carried forward if unused in the current year. Some are even refundable.

Incentives are benefits that are negotiated with state or local economic development, taxation or other government officials as an inducement to locate or expand operations in a specific jurisdiction. Unlike credits, incentives must be negotiated well in advance of a firm commitment.

The financial benefit of the incentive may be reflected in a variety of ways, not necessarily on your state income tax return. Because they are contractual in nature and require each party to perform certain activities, the contract typically contains a recapture provision that requires repayment of the incentive and/or imposes a penalty if the contract requirements are not satisfied.

Incentives offer businesses negotiating power. For example, if a company is planning to build a new facility, it could approach the states of Illinois and Missouri and ask what benefits each can provide. The company can then compare the proposed benefits to determine which state’s package would result in a better financial outcome.

How can credits and incentives benefit businesses?

Cash flow is always a priority for businesses. Tax credits and incentives can help a business reduce or even eliminate certain costs to increase cash flow. Such costs may include human resource activity (i.e., training/screening costs), acquisition, site-preparation and public infrastructure (i.e., rail, sewer, etc.), just to name a few.

Companies may also have an opportunity to reduce telecommunication and utility costs.  These decreased costs, as well as cash grants and refundable tax credits, all result in increased cash flow.

In addition, successful negotiation can produce a reduced effective tax rate or preferential tax treatment, such as special apportionment.

What is the credit and incentive environment like today, and what does this mean for businesses?

That depends on the state. Generally, states are struggling financially and many are taking a step back to review credits and incentives to ensure that these tools are producing the intended results. In Missouri, for example, the governor created the Missouri Tax Credit Review Commission to assess the 61 current credit programs operating in Missouri and to make recommendations.

A report distributed in February noted that the commission recommended eliminating or not reauthorizing 28 credits and improving efficiency in another 30 credits. Connecticut and New Jersey are taking similar action.

For businesses, there are still great opportunities to use these tax-advantaged resources, but they should spend time with a tax professional who can provide direction so the company can realize the full benefit of potential credits and incentives that match its strategy.

Shawndel Rose is manager, State and Local Tax for Brown Smith Wallace, St. Louis, Mo. Reach her at srose@bswllc.com or  (314) 983-1356.

Published in St. Louis