Be green or it all goes to the greedy

By Jody Wiser of Portland, Oregon. Jody runs the citizen watchdog group, Tax Fairness Oregon. Previously, she contributed "Walking away from our $4.9 million investment"

Here’s how to be good for the earth and good for your pocketbook at the same time: make up to 5% interest in less than 6 months while helping the state support renewable energy efforts in Oregon.

It used to be that buying Oregon Business Energy Tax Credits (BETC) was mostly for the greedy. When businesses that earned the BETC couldn’t use them, they were sold, usually to big businesses and wealthy folks. The records show purchases of tax credits valued from hundreds to millions of dollars. While anyone could buy them, there was little advertising of the fact. A year ago I called the Oregon Department of Energy (ODOE) and bought $10,000 worth for about $7,300, to be used over 5 years. My accountant figured I’d be making about 29%. Not bad, if you’re the purchaser, but pretty damn stupid if you’re the state trying to get money to clean energy projects in an efficient manner. That purchase helped amend the rules, but your action is needed too.

In 2011, the legislature changed the rules of the game. On Monday $1,500,000 in BETC go up for auction. Minimum bid: $950 for $1000 in tax credits, or 5% interest in less than six months. The BETC will be sold in units of $1000. Anyone with a tax appetite can bid at the Department of Revenue website. The tax credits can be used to pay 2011 state taxes, and if one happens to buy too many, they are good for three years. Now it’s time for the good as well as the greedy to bid.

If you think earning 5% in less than six months is not necessary or want to up your chances of winning the auction, bid more, bid anyplace between $950 and face value----and support the next round of renewable energy projects at the same time.

For those of us who can’t put solar panels on our roofs, it’s a way of putting a solar panel sticker, geothermal or wave sticker on our front doors. If course if payroll deductions cover all the taxes you owe, this isn’t a great system for you, at least you’ll want to change your withholding. But for those Oregonians who make estimated payments, it’s just a different way to pay up front, and support renewable energy at the same time. The auction starts Monday at 9 a.m. and runs through November 4th.

Comments

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    As a policy and economics wonk, using an auction for these tax credits makes me very, very happy.

    Hopefully the auction goes well, and we'll consider using auctions for some of our other tax credits.

  • (Show?)

    You made 29% on the backs of the taxpayers?

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    I doubt that simply changing your state withholding can affect your ability to use these credits in a given tax year. I'm pretty sure that the BETCs are nonrefundable tax credits, meaning they are limited to amount of taxes you are liable for in a year.

    So, if you install solar at your home and take advantage of the Oregon Residential Energy Tax Credit, this is a less appealing option.

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