On this story, big thanks to RJ of The Global Glass Onion for emailing this story to me. Visit him when you have a looooooooooooooooooooooooooooooooooooooooooooong time to read. ;-)
Oregon is quite progressive in many ways, especially where green energy is concerned. It is quite disappointing when corporate pigs find loopholes to profit at the taxpayers’, not to mention the planet’s, expense.
No, the retail giant hasn't branched to solar panels or wind turbines.
Instead, Walmart took advantage of a provision in Oregon's Business Energy Tax Credit that allows third parties with no ties to the green power industry to buy the credits at a discount and reduce their state income tax bills.
State records show Walmart paid $22.6 million in cash last year for the right to claim $33.6 million in energy tax credits. The cash went to seven projects, including two eastern Oregon wind farms and SolarWorld's manufacturing plant in Hillsboro. In return, Walmart profits $11 million on the deal because that's the difference between what it paid for the tax credit and the amount of its tax reduction.
The loser in the transaction is Oregon's general fund -- which pays for public schools, prisons and health care programs -- because the state is out the full $33.6 million in tax revenues.
Walmart isn't alone. An analysis by The Oregonian shows Costco and U.S. Bank, which also rank among the nation's top 200 wealthiest businesses, have made millions by buying up energy tax credits to cut their Oregon tax bills. Dozens of other companies and hundreds of individual Oregon taxpayers also have cut their tax bills by buying up the tax credits
The practice, known as "pass-through," has become a popular, nearly risk-free way for profitable corporations and high wage-earners to avoid paying taxes in Oregon. But it also has become one more target for critics of the green energy subsidies, which spend state tax dollars to attract low-carbon industry and jobs to Oregon.
"It's so convoluted," says Eric Fruits, an adjunct economics professor at Portland State University who has studied Oregon's energy incentives. "You've got all these dollars swirling around. Everyone is trying to grab them as fast as they can."
The pass-through option "turns what would otherwise be an incentive to make energy investments into a windfall that may not have anything to do with energy," Fruits says.
Program under fire
For years, Oregon has subsidized renewable energy and energy conservation projects by granting tax credits, which can be used as a dollar-for-dollar reduction on state income tax bills. The pass-through practice was put in place in 2001 as a way to allow government agencies and nonprofit organizations to take advantage of the subsidies. Since those groups don't pay state taxes, the credits are worthless unless they can be sold to a third party.
The ability to sell the credits also allowed start-up companies with no Oregon tax liability to leverage upfront cash for their green energy projects.
The tax credits, known as BETC, or "Betsy," have come under increasing fire this year because the cost to taxpayers skyrocketed. It went from about $10 million in 2007 to an estimated $167 million in the 2009-11 biennium at the same time the economic recession hammered other areas of the state budget.
A previous investigation by the newspaper showed state officials intentionally downplayed the estimated cost of the program before the 2007 Legislature voted for substantial increases to the maximum subsidies. The newspaper's latest analysis also found:
Walmart, Costco and U.S. Bank, which top the list of energy credit buyers, shelled out a combined $67 million to avoid paying $97 million in Oregon income taxes.
Walmart and others are making money on projects that were closed, went belly up or never produced the energy or energy savings they initially claimed.
Out-of-state corporations and others looking for tax breaks are claiming an increasing share of the money that is supposed to pay for clean energy and conservation…
Inserted from <The Oregonian>
I wish I could claim to be planning to boycott WalFart over this, but I have already been boycotting them for over ten years, because of the way my tax dollars pay for food stamps for their underpaid employees and because they have done more to drive US manufacturing overseas than any other entity.
I hope that Oregon will continue BETC, with added safeguards to prevent exploitation by corporate profit-mongers so unethical that they would fleece their own grandmothers for a nickel.