Energize Your Tax Savings
It’s ba-a-a-a-ack! Tax season is here to remind us just how much we made–or didn’t make–last year, and what we pay for procrastinating. That’s right, April 15 filers–don’t even think about waiting till the April 17 deadline this year!
Rather than dread this financially focused time, consider taking advantage of the numerous eco-friendly incentives offered by the state.
ON YOUR ROOF
Renewable energy systems like solar thermal (water heating) and photovoltaic (PV) not only spite HECO’s skyrocketing electric rates, but also earn you a pretty substantial tax deduction. Installing/retrofitting for PV can earn you up to $5,000 or 35 percent of the cost of the system (whichever is less) in credits for a single-family home. Solar thermal systems rack up a bit less in credits, ringing in at $2,250 or 35 percent of the cost.
Just who can take advantage of these state-funded opportunities? “Everyone is eligible,” says Mallory Fujitani, public information officer for the State of Hawaii Office of Taxation.
The federal government chips in, too: As long as the system was installed after 2008, there is no maximum allowance on the 30 percent credit offered.
FOR YOUR WHEELS
Alas, incentives for hybrid cars are long gone, so you’ll rack up savings for your new Toyta Prius or Honda Insight only when filling up at the pump. (With gasoline prices now reaching the mid-$4 range, that extra green should be a more-than-welcome motivation.)
The government and its incentives have moved on to support electric vehicles (EVs) such as Chevy Volt, Mitsubishi I and Nissan LEAF. So if you’ve traded in your “regular” car or truck for one of these not-so-back-to-the-future vehicles, you can reap some pretty huge rewards.
Trickling down from the 2009 federal stimulus plan known as the American Recovery and Reinvestment Act, state rebates are handed out through Hawaii’s Electric Vehicle Ready Program for each EV purchased. But, “It’s first come, first serve,” warns Katherine McKenzie, renewable energy analyst for the Hawaii State Energy Office. This means that, like the hybrid vehicle tax breaks, EV credits will cease to exist once the well runs dry. For now though, McKenzie assures taxpayers that funds are still available ($37,731.89 as of March 1).
As long as your EV qualifies with IRS standards, which stipulate battery parameters and acceptable make and models, “EV owners can receive up to $4,500 in state tax credits,” according to McKenzie. Other tax bonuses include up to $7,500 in federal money for your qualifying EV and up to $500 in state money for the installation of a charger station in your home. “It’s really important for Hawaii to reduce our use of petroleum and nonrenewable fuels,” says McKenzie, who adds that a federal grant program to get a publicly accessible charging network up and running across Hawaii concludes at the end of this month.
IN YOUR BACKYARD
If you live in the City and County of Honolulu, Bill 58 allows you to claim a property tax exemption for the value added to your home by qualified alternative energy sources, specifically wind and solar. Any source supplied by geothermal energy or fossil or nuclear fuels does not fit the bill. And here’s the best part: the assessed exemption gets locked in for 25 years, and there’s no cap!
But not so fast. Even though legally all residential properties with these systems are eligible for this tax credit, not a single residential property has been awarded the exemption, according to Gary Kurokawa, real property assessment administrator for the City and County of Honolulu. “We are not adding on the value [to the home],” says Kurokawa, adding that the Real Property Assessment Division isn’t even going out to assess the homes. “It makes no sense to assess the home[s] just to exempt to zero. Technically we’re not adding any value, so there’s nothing to exempt,” Kurokawa clarifies.
In other words, the City and County is claiming that they lack sufficient evidence and viable data to determine how much value your alternative energy system adds to your home. Therefore, even though the City Council unanimously passed Bill 58 back in 2009, it’s essentially moot because applications are sitting unprocessed in the Real Property Assessment Division office.
Slight glimmer of hope: Kurokawa assures all applicants, “If [they] want to submit the application, we will keep it on file.” Yet more promising: Commercial applicants are being awarded the exemption and new legislation was introduced in the City Council in 2011 to try to clarify the currently muddled bill. Forms must be submitted by Sept. 30 in order to be considered for that tax year.