The following is a summary of federal tax credits and incentives available to individuals and businesses that pursue environmentally-friendly lifestyles and policies provided under the Internal Revenue Code.

Alternative and Renewable Energy Tax Credits and Incentives

• Business Energy Tax Credit. This corporate tax credit is available to businesses that consume certain alternative energies.
  
  
• Renewable Electricity Production Tax Credit. This corporate tax credit is available to businesses for electricity generated by qualified energy resources and sold during the taxable year.
  
  
• Residential Renewable Energy Tax Credit. This credit is available to individual taxpayers that consume certain alternative energies.
  
  
• Modified Accelerated Cost-Recovery System (MACRS) Plus Bonus Depreciation. This provision allows for 50% bonus depreciation on eligible renewable energy systems acquired and placed into service in 2008.
  
  
• Alternative Fuel Vehicle Property Credit. This credit is available for taxpayers that place qualified alternative fuel vehicle property in service during the taxable year.
  
  
• Credit for Producing Fuel From a Nonconventional Source. This credit is available to taxpayers that sell fuel produced from a nonconventional source.
  
  
• Credit for Production of Low Sulfur Diesel Fuel. This credit is available to small business refiners that produce low sulfur diesel fuel.
  
  
• Deduction for Capital Costs Incurred in Complying with EPA Sulfur Regulations. This expense deduction is available to small business refiners required to comply with the EPA’s highway diesel sulfur controls.
  
  
• Tax Incentives for the Production, Sale, and Use of Alternative Fuels. These tax incentives are available for the production, sale, and use of alternative fuel mixtures.

Energy Conservation Incentives

• Bicycle Commuters Fringe Benefit. Qualified Bicycle Commuting Reimbursements have been added to the list of qualified transportation fringe benefits.
  
  
• Alternative Motor Vehicle Credit. This credit is available to the purchasers of Qualified Alternative Fuel Motor Vehicles.

• Tax Credit for New Qualified Plug-In Electric Drive Motor Vehicles. This credit is available to purchasers of New Qualified Plug-In Electric Drive Motor Vehicles.
  
  
• Energy Efficient Appliance Tax Credit for Manufacturers. This credit is available to manufacturers of high-efficiency residential appliances.
  
  
• Energy Efficient Commercial Buildings Tax Deduction. This deduction is available primarily to owners of new or existing commercial buildings that install energy efficient lighting, heating, and cooling systems.
  
  
• Tax Credit for Energy Efficient Improvements to an Existing Home. This is a nonrefundable lifetime credit of up to $500 available to taxpayers that make qualifying energy saving improvements to an existing home.
  
  
• Energy Efficient New Homes Tax Credit for Home Builders. This credit is available to builders of new energy efficient homes.
  
  
• Clean Renewable Energy Bonds (“CREBs”). CREBs are available to certain entities, primarily in the public sector, to finance renewable energy projects.
  
  
• Qualified Energy Conservation Bonds. These bonds are available to state and local governments to finance certain types of energy related projects.
  
  
• Residential Energy Conservation Subsidy Exclusion. This provision exempts conservations subsidies provided by public utilities from customers’ gross incomes.

Carbon Dioxide Emissions and Recapture

• Carbon Dioxide Sequestration Credit. This credit is available to taxpayers for the capture of qualified carbon dioxide at a qualified facility and used by the taxpayer in qualified enhanced oil or natural gas recovery projects.
  
  
• Qualifying Advance Coal Project Tax Credit. This credit is available to taxpayers that invest in advanced coal projects.
  
  
• Qualifying Gasification Project Credit. This credit is available to taxpayers that invest in qualified gasification projects.

Environmental Clean-Up

• Brownfields Remediation Expensing. This deduction is available to taxpayers for the expense of hazardous substance or petroleum clean-up.

Robert Lewis Jackson, 314-342-8076
rjackson@armstrongteasdale.com

Jill M. Palmquist, 314-552-6635
jpalmquist@armstrongteasdale.com