Nov 28, 2022
Tax Deductions in the Ash Clouds
BY Sandy Lender
At press time, I couldn’t find reliable stats on the amount of methane being released from the alleged sabotage of Nord Stream 1 and Nord Stream 2. Suffice it to say, the bubbling gas devastating marine life in the Baltic Sea was probably more than your properly operated, Tier IV Final wheel loader at the asphalt plant. I can’t say if the pipelines’ greenhouse gas (GHG) or particulate matter emissions rival the collective emissions from Stromboli, Erta Ale, Nyiragongo, Piton de la Fournaise, Dukono, Ibu, Krakatau, Merapi, Semeru, Lewotolo, Popocatepetl, Santiaguito, Fuego, Masaya, Nevado del Ruiz, Reventador, Sangay, Sabancaya, Nevados de Chillán, Mount Erebus, Kilauea, Yasur, Shiveluch, Ebeko, Sakurajima and Suwanose-jima, considering those volcanoes currently erupt at different rates of spew.
Until our global elite focus on the big emitters of GHGs (whether naturally occurring or based in China), it is criminal that our industry continues to be targeted, maligned and forced to comply with ever-narrowing regulations. When a state agency dictates private business owners can no longer purchase robust pieces of machinery for infrastructure construction and/or maintenance, it irks me. When an unelected agency dictates to the asphalt industry, which has been ratcheting down its emissions numbers and carbon footprint on its own, that we have a new, magic number to attain instead, it makes me wonder about the reading comprehension skills of the person at the top.
Any CEO worth his or her salt will tell you to lean on your employees’ strengths. Bring them to the table to explore attainable solutions together. Instead, the elitists have come up with random numbers, stapled money to the clouds around the ash plumes of the above-listed volcanoes, and demanded of us, “Meet this target next.”
Before this note becomes too negative, let me say the construction industry overall has an opportunity to grab some of our country’s recently printed dollars waving above the ash plumes.
Take the tax credit bribes for purchasing equipment with batteries comprised of Rare Earth Minerals as an example. Your electric vehicle (EV)—depending on its gross vehicle weight rating to battery capacity ratio—could be tax deductible.
On page 34, I’ve included another installment of the series on upcoming grant monies through the dubiously named Inflation Reduction Act (IRA). With the Advanced Industrial Facilities Deployment Program, the Department of Energy (DOE) is making available $5.8 billion in rebates for facilities that can prove a 20% reduction in their GHGs with installation of advanced technologies. The Internal Revenue Service (IRS) is expanding its credits for purchases of “clean” equipment. In fact, if you look at Section 45 of the IRA, not only will you develop a migraine, but you will also get a sense that the IRS will reward you with tax incentives for purchasing EVs and advanced technologies.
I’m not a tax advisor. Please take that whole section to your tax professional.
But examine the concept behind Section 45W, where it is implied the electric off highway vehicle doesn’t have to be sourced from North America. Again, let a tax professional read it more thoroughly and advise you on the specifics.
Let me finish by saying, installing advanced technology to lower emissions at any facility is a responsible move. If it’s possible to cut extra emissions from an operation, that’s a laudable goal. If the DOE is willing to hand you a 50% rebate for achieving the goal, that’s even better. If the IRS is willing to extend an extra tax credit to you for the business expenditure, why not take advantage of that while it’s available?
So far, the asphalt industry has been making these strides out of a desire to be good stewards of the land and a willingness to placate homeowners who built right up to our property lines. It’s nice to think future strides come with a side of rebate from Uncle Sam. What has me a little on edge is the idea that government entities and agencies are demanding lower numbers from an industry that’s already lowered its numbers. We can’t single-handedly make up for the 26 volcanoes currently erupting around the globe. Honestly, I don’t think it’s fair to ask us to.
Have a Safe and Lovely Holiday Season,