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.
When Oregon started handing out jumbo tax subsidies for renewable energy projects two years ago, one of the biggest beneficiaries was also one of the world's richest corporations -- Walmart.
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.
6 comments:
It's a shame that these large corps, who don't need the money, take advantage of a loophole to avoid paying taxes.
Never shopped at Walmart, never will. When the Wii was there when it first came out, I told my son no, because 'you know how mommy feels about Walmart'. I was still able to get one for Xmas that year (my BIL worked for a company that designs software for the games), so I wound up not being mean mommy after all.
Interesting take on the evils of green energy. It seems to me that the anger you feel toward these corperations is a bit misplaced. This isn't some tiny loop hole that devious Walmartian attornies discovered; it is advertised in bold type on the Oregon Dept of Energy website begging business to use this program which enables non-profits to participate in green initiatives while receiving financial incentives. No doubt this program squeezes cash from the public coffers and reeks of pork barrel. Truth be known however, this green-funding program is yet another example of left-wing solutions that spend taxpayer dollars to circumvent fair trade to fund an environmentalist agenda. Its hilarious that you didn't care until someone from corperate America benefited.
Also, for what its worth you should do a bit of homework on Walmart's sustainability record including their revolutionary "super sandwich bale" program and organic composting projects which are reducing landfill waste by up to 75% with a long-term goal of zero waste from all US facilities. Their Acres for America program permanently conserves an acre of pristine wildlife for each acre of its current and future footprint (about 400,000 acres to date.)
Sorry. I know you love to hate Walmart. Even though your bff Hillary Clinton was on the Walmart board of directors, its ok. Go on being a hater.
I manufacture and sell industrial energy efficient lighting in the state. Lots of my customers sell their tax credits, either non profits, govt or business that doesnt want to wait for the tax credits or isnt making enough money to pay taxes.
Their is nothing wrong with Walmart or anyone else (any individual, S corp or C corp can buy Oregon BETC credits) buying tax credits. Its affords all those that have to or need to sell them up front money for energy efficiency projects.
The state has lowered the pass thru rate recently.
Regardless of the pass thur rate the purchaser of the tax credits gets, the state pays out the same amount whether to Walmart or the customer that keeps their tax credits.
I'm no big fan of Walmart, but they do have very impressive energy programs (regardless of the motives).
Sure the BETC program isn't perfect and its real easy to complain about the govt.from any side of the political spectrum.
Most issues are not black or white as people assume them to be, the goal should be to make the best program we can in the state, that is as cost effective as possible, saves the most energy and produces the most jobs.
Thanks Lisa. I'm glad he got his Wii.
Chris, your comment was mist welcome until you started name calling. Are you a WalMart representative. Your views are welcome. You peronal insults are not. This is your only warning. For the record, I voted against Hillary.
NL, you bring up a perspective that I had not considered, and you make an excellent point for your position. Thank you for sharing this. I understand the issue better now.
H&M and Wal-Mart destroy and trash unsold goods - This week the New York Times reported a disheartening story about two of the largest retail chains. You see, instead of taking unsold items to sample sales or donating them to people in need, H&M and Wal-Mart have been throwing them out in giant trash bags. And in the case that someone may stumble on these bags and try to keep or re-sell the items, these companies have gone ahead and slashed up garments, cut off the sleeves of coats, and sliced holes in shoes so they are unwearable.This unsettling discovery was made by graduate student Cynthia Magnus outside the back entrance of H&M on 35th street in New York City. Just a few doors down, she also found hundreds of Wal-Mart tagged items with holes made in them that were dumped by a contractor. On December 7, she spotted 20 bags of clothing outside of H&M including, "gloves with the fingers cut off, warm socks, cute patent leather Mary Jane school shoes, maybe for fourth graders, with the instep cut up with a scissor, men’s jackets, slashed across the body and the arms. The puffy fiber fill was coming out in big white cotton balls.”The New York Times points out that one-third of the city's population is poor, which makes this behavior not only wasteful and sad, but downright irresponsible. Wal-Mart spokeswoman, Melissa Hill, acted surprised that these items were found, claiming they typically donate all unworn merchandise to charity. When reporters went around the corner from H&M to a collections drop-off for charity organization New York Cares, spokesperson Colleen Farrell said, “We’d be glad to take unworn coats, and companies often send them to us.".
Thanks, RJ. What greed.
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