OUR THOUGHTS ON:

Go Green and Get a Tax Deduction

Automobile

By Kathleen Petrucci

Ford’s Go Green Dealership Sustainability Program was unveiled over the weekend at the NADA convention in Orlando, Florida. Under the program, Ford will collaborate with dealers to implement cost-effective ways to improve the energy efficiency of their facilities. Specifically, Ford hopes the end result will be the long-term reduction of an individual dealer’s carbon footprint, as well as operating costs.

Dealers interested in participating in the Go Green Program will first receive a comprehensive energy assessment from Ford with the help of efficiency experts from the Rocky Mountain Institute. After a thorough assessment has been completed, Ford and the dealer will tailor a program to meet the dealer’s needs. A fee will apply for the assessment.

Although facility upgrades for improvements to appliances, insulation and power systems could run between $100,000 and $800,000 per dealer (depending on size, location and other factors), Ford believes that, on average, dealers can recoup the costs within three years because of the energy cost savings.

In addition to monthly savings, by upgrading existing facilities or building new facilities between January 1, 2006 and December 31, 2013 to Energy Policy Act (EPAct) standards, dealers can also take advantage of federal income tax incentives. Deductions of up to $1.80 per square foot are available to dealers for achieving a 50% energy cost savings. Reduced deductions of $.30 to $.60 per square foot are available for dealerships falling short of the 50% threshold.

For more information related to tax incentives available in connection with dealership sustainability programs like Go Green, please contact a member of the Schneider Downs Auto Industry Group.

Schneider Downs provides accounting, tax, wealth management and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA, and Columbus, OH.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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