|
.:COMMERCIAL FINANCIAL INCENTIVES
As a result of Global Warming, the recent push for renewable energy has created very attractive tax incentives for Hawaii businesses to go solar!
CREDITS:
30% Federal Business Energy Tax Credit
35% State of Hawaii Energy Conservation Tax Credit
| Tax Credit Table |
Commercial |
| Federal |
30% |
$500,000 max |
| Hawaii |
35% |
unlimited |
| Total |
65% |
unlimited |
|
.:DEPRECIATION
Commercial businesses benefit from Federal and State Accelerated Depreciation through the Modified Accelerated Cost Recovery System (MACRS). Solar electric equipment has a life of 5 years under MACRS for Federal and State.
BASIS:
Federal: 85% of the cost of the system!
State: 100%!
In addition to the MACRS, taxpayers can elect Section 179 treatment which allows up to $112,000 to be deducted for 2007 on the Federal return. The remainder, if any, is then under the MACRS. Under the similar State treatment, $25,000 can be taken in year 1.
Example $100,000 system:
28% Federal bracket:
($123,700 married - filing jointly)
The actual cost drops as your federal
tax bracket increases:
28% Bracket 12.75% Cost
33% Bracket 10.25% Cost
35% Bracket 9.25% Cost |
$ 100,000 Cost
$ (35,000) State Credit
+ $ 9,800 Federal Tax on State Credit [28% Fed bracket]
$ (30,000) Federal Credit
$ (32,050) Depreciation [28% Fed / 8.25% State tax brackets]
_________________________________
$12,750 COST after tax incentives
or 12.75% (non-discounted) |
|
