"LLMs for Python Engineers: Advanced Data Analysis and Semantic Kernel",Oleks...
Tax Incentives To Ease The Pain Presentation Full Version
1. Tax Incentives to Ease the
Pain
California Center for Sustainable Energy
October 14, 2009
Presented by Walter Wang, JD, LL.M
2. Circular 230 Disclosure
Please be advised that, based on current IRS
rules and standards, the following presentation
was not intended or written to be used, and
cannot be used by the taxpayer, for the purpose
of avoiding penalties that may be imposed on
the taxpayer. If this presentation is provided in
any manner to another taxpayer, he or she
cannot use the advice and should seek advice
based on his or her own particular
circumstances from an independent tax advisor.
4. Current Economic Conditions
Global economic recession – Are we
out of it yet?
Significantly lower oil prices in 2009
compared to Summer 2008 highs.
Energy/Oil Billionaire T. Boone Pickens
forecasts oil will pass $75/barrel before
the end of the year and the average
price per barrel will be $80 in 2010.
5. Current Climate Conditions
Recession = Global decline in greenhouse
gas emissions in 2009.
If there was no recession, then:
By late in the century, 90% of the Sierra snow
pack would be lost, sea level rising by more than
20 inches, and there would be 3 to 4 times
increase in heat wave days (“Climate Change
Proposed Scoping Plan”, California Air
Resources Board (October 2008)).
San Diego Foundation 2050 Report
10. Purchasing a Hybrid Car
Tax credit available to vehicles placed
in service after December 31, 2005 and
before December 31, 2010.
Tax credit applies only to the original
purchaser of a new, qualifying hybrid
(used hybrids need not apply).
Leases – The lessor claims the credit.
AMT Limitations – None for 2009
11. Purchasing a Hybrid
Tax Credit is phased out once the
manufacturer has sold its 60,000th hybrid
vehicle.
What is the phase out period?
1st 2 quarters of the phase out period – 50% of the
allowable credit.
3rd and 4th quarters – 25% of the allowable credit.
No credit is available for cars purchased after the last
day of the 4th quarter of the phase out period.
12. Qualifying Hybrids
Honda and Toyota/Lexus hybrids no longer
qualify as tax credits have been completely
phased out.
GM – Full Tax Credits Applies
Ford – Phase-Out Period – Reduced Credits
Chrysler – Full Tax Credit Applies
Mazda – Full Tax Credit Applies
Nissan – Full Tax Credit Applies
14. Claiming the Tax Credit for the
Purchase of a Hybrid Vehicle
IRS Form 8910
15. What about clean-diesel cars?
Tax credit available as an “advanced lean
burn technology motor vehicle”
Phase out rule applies here as well.
Qualifying cars
2009 Audi Q7 TDI - $1,150
2009 BMW 335d - $900
2009 BMW X5 xDrive35d - $1,800
2009 Mercedes GL 320 BlueTEC - $1,800
2009 Mercedes R 320 BlueTEC - $1,550
2009 Mercedes ML 320 BlueTEC - $900
2009 Volkswagen Jetta 2.0L TDI Sedan - $1,300
2009 Volkswagen Jetta 2.0L TDI SportWagen - $1,300
2009 Volkswagen Toureg TDI - $1,150
16. Other Credits Available for
Purchase of a Vehicle
Alternative Fuel Motor Vehicle Credit
“alternative fuel” means compressed
natural gas, liquefied natural gas, liquefied
petroleum gas, hydrogen, and any liquid
at least 85% of the volume of which
consists of methanol.
Honda Civic GX - $4,000
What about the “Flex Fuel” designation?
17. Other Credits Available for
Purchase of a Vehicle
Plug-In Conversion Credit
10% of the cost of converting such vehicle
as does not exceed $40,000.
18. Plug-In Electric Drive Vehicles
Credit for new qualified plug-in electric drive
motor vehicles (2009)
$2,500 + $417 for each kWh of traction battery
capacity in excess of 4kWh.
Credit is limited to between $7,500 to $15,000
depending on the gross vehicle weight of the car.
Golf carts need not apply.
Phase-out begins after 250,000th vehicle is sold
after December 31, 2008.
AMT Limitations
Use IRS Form 8834 to claim the credit.
19. Plug-In Electric Drive Vehicles
Credit amount after December 31,
2009
$2,500 + $417 for each kWh of traction
battery capacity in excess of 5kWh.
Credit is limited to $5,000.
Phase-out threshold is now 200,000.
20. Plug-In Electric Drive Vehicles
Applicable Vehicles Include:
Fisker Karma
Tesla Roadster
Tesla Model S
Chevrolet Volt
Nissan Leaf
21. Energy Efficiency – The Low
Hanging Fruit
30% tax credit for amounts paid or incurred
for qualified energy efficiency improvements
and residential energy property
expenditures.
Limitation: $1,500 (cumulative for all
expenditures for 2009 and 2010).
Original use of the property must begin with
the taxpayer.
Tax credit only applies to a dwelling unit that
is a person’s principal residence.
This includes qualifying manufactured homes.
22. Energy Efficiency – The Low
Hanging Fruit
What improvements qualify?
“qualified energy efficiency improvements” =
“energy efficient building envelope components”
Insulation material or system (including any vapor
retarder or seal to limit infiltration) that is specifically
and primarily designed to reduce heat loss or gain of a
dwelling unit when installed. The products must meet
the prescriptive criteria as established by the 2009
IECC, as was in effect on February 17, 2009.
Exterior Windows, Skylights, & Doors that have a U
factor and Solar Heat Gain Coefficient of 0.30 or below
and meets the prescriptive criteria as established by
the IECC.
23. Energy Efficiency – The Low
Hanging Fruit
Storm windows and doors that, in combination
with the exterior window or door has a U factor
and SHGC of 0.30 or below
Metal roof (1) that has appropriate pigmented
coatings that are specifically and primarily
designed to reduce the heat gain of a dwelling
unit when installed on the dwelling unit, and (2)
meets or exceeds either of the applicable Energy
Star program requirements.
24. Energy Efficiency – The Low
Hanging Fruit
Asphalt roof that (1) has appropriate cooling
granules that are specifically and primarily
designed to reduce the heat gain of a dwelling
unit when installed, and (2) meets or exceeds
either of the applicable Energy Star program
requirements.
25. Energy Efficiency – The Low
Hanging Fruit
Tax credit for expenditures made with
respect to eligible building envelope
components does not include
installation costs.
26. Energy Efficiency – The Low
Hanging Fruit
“Residential energy property
expenditures” = “qualified energy
property”
Electric heat pump water heater that
yields an energy factor of at least 2.0 in
the standard DOE test procedure.
Electric heat pump that achieves the
highest efficiency tier established by the
Consortium for Energy Efficiency (1/1/09)
27. Energy Efficiency – The Low
Hanging Fruit
Central air conditioner that achieves the highest
efficiency tier established by the Consortium for
Energy Efficiency (1/1/09)
Natural gas, propane, or oil water heater that has
an energy factor of at least 0.82 or a thermal
efficiency of at least 90%.
Biomass-burning stove to heat a home or to heat
water for use in the home and that has a thermal
efficiency rating of at least 75% as measured
using a lower heating value.
28. Energy Efficiency – The Low
Hanging Fruit
Natural gas furnace that achieves an annual fuel utilization
efficiency rate of not less than 95.
Natural gas hot water boiler that achieves an annual fuel
utilization efficiency rate of not less than 90.
Propane furnace that achieves an annual fuel utilization
efficiency rate of not less than 95.
Propane hot water boiler that achieves an annual fuel
utilization efficiency rate of not less than 90.
Oil Furnace that achieves an annual fuel utilization
efficiency rate of not less than 90.
Oil hot water boiler that achieves an annual fuel utilization
efficiency rate of not less than 90.
Advanced main air circulating fan (fan that is used in a
natural gas, propane, or oil furnace and has an annual
electricity use of no more than 2% of the total annual site
29. Energy Efficiency – The Low
Hanging Fruit
Installation costs for qualified energy
property are included for purposes of
determining the tax credit.
Reliance of Manufacturer’s Certification
that property qualifies as either
qualified energy property or eligible
building envelope component is
permissible.
30. Energy Efficiency – The Low
Hanging Fruit
Special Rule for Energy Star
Not all products with the Energy Star label qualify
for this tax credit. Only products that meet the
requirements of the tax credit qualify.
For amounts paid or incurred before June 1,
2009 for property placed in service after February
17, 2009:
Taxpayers may rely on the Energy Star label for
exterior windows and skylights, if the window or
skylight is installed in the region identified on the label.
31. Energy Efficiency – The Low
Hanging Fruit
Use IRS Form 5695 to Claim the
Credit.
No AMT Limitation in 2009.
Condominiums – Each homeowner
shall be treated as having made the
individual’s proportionate share of any
expenditures of the HOA.
32. Energy Efficiency – The Low
Hanging Fruit
State Developments:
CPUC’s recent approval of approximately
$3.1 billion in ratepayer funding for energy
efficiency programs for 2010-2012.
33. Energy Efficiency – The Low
Hanging Fruit
Strategic Plan goals for the residential sector are:
Home buyers, owners and renovators will implement a
whole-house approach to energy consumption that will
guide their purchase and use of existing homes, home
equipment (e.g., HVAC systems), household appliances,
lighting, and "plug load" amenities.
Plug loads will be managed by developing consumer
electronics and appliances that use less energy and
provide tools to enable customers to understand and
manage their energy demand.
The residential lighting industry will undergo substantial
transformation through the deployment of high-efficiency
and high performance lighting technologies, supported by
state and national codes and standards.
34. Going Solar?
30% Tax Credit on the purchase of qualified
solar water heating property expenditures.
“qualified solar water heating property
expenditure” is an expenditure for property to
heat water for use in a dwelling unit located in the
US and used a a residence by the taxpayer if at
least half of the energy used by such property for
such purpose is derived by the sun.
35. Going Solar?
30% Tax Credit for qualified solar
electric property expenditures
Both the tax credit for solar water
heating property and solar electric
property may be taken in the same
year
No AMT Limitation
Excess tax credit can be carried
forward.
36. Going Solar?
CA incentives
Solar Water Heating Pilot Program
($1,500 maximum)
California Solar Initiative
Sliding scale down rewards early entrants
Current step = 5
EPBB = $1.55/watt
Next step – incentive gets reduced down to $1.10
/watt
37. Going Solar?
Taxability of CSI Rebate
Since the CSI rebate is from ratepayer
funds, for residential application, the
rebate is exempt from Federal income tax.
The CSI rebate is exempt from CA
income tax.
39. Going Solar?
Other Tax Issues:
Sales tax applies to the sale of the system
but does not apply to installation costs.
No property tax increase as a result of the
installation of solar electric or solar hot
water systems.
40. Going Solar?
Financing Options
Cash Purchase
Home Equity Loan
Community Based Financing
Power Purchase Agreements
Leases
41. Going Solar?
Other Issues
Condo’s – similar rule to solar hot water heating
systems
HOA Issues
CA Civil Code Sec. 714 and 714.1
Feed In Tariff (AB 920)
Requires electric utilities to adopt by January 1, 2011,
a net surplus electricity compensation valuation to
compensate a net surplus customer-generator.
Does not limit an eligible customer’s eligibility for other
rebates, incentives, or credits.
42. Thank You
Contact Information:
Walter Wang, JD, LL.M
Managing Director
Sunflower Tax
(619) 231-2712
walter.wang@sunflowertax.com
www.sunflowertax.com
