Baseball, apple pie, and finding creative ways to pay fewer taxes, is there anything more American? Judge Learned Hand famously said in 1934, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Since the inception of the Federal Income Tax, taxpayers have looked for increasingly creative ways to avoid it. This exploration is no different: A taxpayer attempts to wash his hands of his tax liability all together.
Renewable Energy Tax Credits: An Opportunity to Sustainably Optimize Taxes
Ted Stotzer
Investment Tax Credits (“ITCs”) and Production Tax Credits (“PTCs”, and together with ITCs, “RETCs”) have existed for decades and reflect the U.S. government’s commitment to incentivizing clean energy solutions in industry and commerce. The availability of RETCs was most recently extended by the Inflation Reduction Act of 2022 (“IRA”), which fundamentally transformed policy in this space by tying such credits’ expiration to the U.S. reaching certain targets for greenhouse gas reductions. While the recent change in Executive Branch leadership casts doubt over the longevity of RETCs, a full repeal seems unlikely given the scope and scale of domestic projects which utilize and benefit from such credits. This article discusses how RETCs may benefit both buyers and sellers in an increasingly uncertain environment.
