Oregon businesses can receive a state tax credit for projects that reduce energy used in transportation. Non-profits and government agencies in Oregon can transfer their energy tax credit project eligibility to a business or individual with Oregon tax liability. Funds from federal grants must be deducted on a dollar-for-dollar basis from the project costs. The following projects are eligible for the Business Energy Tax Credit.
Bicycle Project
An employer purchases bicycles (or equipment to store bicycles) for employees to reduce vehicle miles driven a minimum of 45 working days per calendar year. The maximum eligible cost for a bicycle (including light and bolted equipment) is $800.
- Examples: An employer purchases bicycles for employees to use to commute to work. An employer purchases bicycle storage lockers to house the bicycles.
Carpool/ Vanpool
An employer provides a transportation service for registered members of a carpool or vanpool for at least
150 calendar days per year. Eligible costs include the vehicle operation costs, but does not include the cost of the vehicle. Pre- and post-project surveys must be conducted and reported to qualify for a tax credit.
- Example: The employer provides a 7-passenger van to employees for regular commute between Corvallis and Eugene. The program will provide the service for about 250 days per year and the vehicle will be used 100 percent of the time for employees commuting. Employees who are interested in the vanpool will be registered in a member list.
Commuter Pool Vehicle
An employer purchases vehicles for transporting three or more riders. The vehicle must reduce vehicle miles traveled at least 150 days per calendar year. Applicants receiving partial funding from federal dollars will only receive a tax credit for the required match amount. Transportation districts, mass transit districts, and metropolitan service districts within communities of 50,000 or more people are not eligible.
- Example: An employer purchases a 2006 Chevrolet 10-passenger van for employees commuting from Salem to Portland. The employer estimates that seven employees will use the van five days per week rather than driving alone to work. The vehicle will be used 100 percent of the time for employee commuting.
Financial Incentive Programs
An employer pays financial incentives to employees to reduce vehicle miles driven at least 45 days per calendar year. Employers must submit an incentive program plan for approval by the Oregon Department of Energy.
- Example: Employees log the dates for walking, biking, carpooling, vanpooling or teleworking instead of driving alone to work. When they log 45 days of using alternative ways to get to work, they are eligible for a $20 voucher the employer purchases from a store.
Individualized Travel Behavior Change
An employer participates in a program approved by the Oregon Department of Energy that reduces vehicle miles traveled through one-on-one contact with participants in a specific geographical area or in a targeted group. Pre- and post-project surveys must be conducted and reported to qualify for a tax credit.
- Example: In order to reduce the demand for on-campus parking spaces at a college, 50 percent of a staff member’s time is dedicated to contacting employees and students who are interested in giving up their parking spaces. The staff member provides one-on-one assistance to the employees/students in exploring alternative travel options. The program lasts for six months. Approximately 500 employees are approached with an estimated 20 percent participation. The project reduces more than 100,000 vehicle miles annually. The employer must include the pre-project survey and post-project survey with the application. The employer applies for a tax credit for the payroll expenses that the staff member incurs working on the program and the material costs.
Research, Development and Demonstration Project (RD&D)
An RD&D project is one that is not a standard practice, is innovative, and reduces vehicle miles traveled. The applicant must conduct pre- and post-surveys that measure travel reduction and submit the results with the application for final certification. Transportation districts, mass transit districts, or metropolitan service districts within communities of 50,000 or more people may not qualify for more than $2 million annually in eligible costs for RD&D projects.
Rideshare Matching Service
An employer has a program that provides rideshare matching services to registered members to find shared rides for commuting on a regular basis. Eligible costs include capital expenditures, administrative and communication cost. Pre- and post-project surveys must be conducted and reported to qualify for a tax credit.
- Example: An employer has a program that will provide an on-line matching service for riders to find shared rides for commuting on a regular basis. It is anticipated that the program will have more than 200 members with 20 of them carpooling to work at least once a week. It is estimated to reduce more than 100,000 vehicle miles annually. A pre-project survey and post-project survey must be included with the application.
Telework
An employer purchases equipment that allows an employee to work from home or an office closer to home at least 45 working days per calendar year or purchases equipment that reduces employees’ business-related travel by at least 25 percent.
- Example: An employer purchases six laptop computers with fax modems and software programs compatible with the office systems, six printers and installs new phone lines in six home offices. The equipment will allow six employees to telework two days per week. Itemized costs for telework equipment include modems, computers, printers, software, installation, phones, fax machines and copiers. The application must include the brand name and model of each piece of equipment and software program.
Transit Passes
An employer purchases transit passes for employees. Monthly pass participants must use transit at least 45 working days per calendar year. The total cost of a group pass program is eligible. The applicant must have a written agreement with a public, private or non-profit transportation provider to pay for transit passes with specific start/stop dates. Equipment used as a shelter for people waiting for transit may also qualify for a tax credit.
- Example: An employer purchases transit passes for 50 employees. The employer estimates these employees will use transit at least three workdays per week.
Transportation Management Services Fees
Fees paid by an employer to a Transportation Management Association (TMA) or non-profit organization for providing services to employees that reduce the number of vehicle miles driven. Projects must be able to demonstrate travel reduction or be part of a qualifying transportation project. The TMA fee cannot exceed the cost of the transportation project. The applicant must provide an agreement with the transportation provider for specific services that reduce vehicle miles traveled.
- Example: An employer paid $2,500 in fees to a TMA provider for services to employees that reduce vehicle miles traveled.
Transportation Services
Employers that pay the cost of providing transportation services for riders are eligible for a Business Energy Tax Credit. Eligible cost includes vehicle operation cost but does not include the cost of the vehicles. An operations and expense worksheet detailing costs of project must accompany pre-certification application. Transportation districts, mass transit districts, and metropolitan service districts in communities with 50,000 or more people are not eligible.
- Example: The owner of an apartment complex for seniors provides transportation services for the residents for doctors’ appointments and shopping trips. They anticipate that they provide 10,000 one-way trips and reduce 80,000 vehicle miles annually.
How to Apply
- Send a completed Business Energy Tax Credit application for Preliminary Certification for Transportation Projects prior to your project start date to the
Oregon Department of Energy,
625 Marion St. NE,
Salem, OR 97301-3737.
Forms are available on our Web site at www.oregon.gov/energy. Include payment to cover application review costs and required supporting documentation for each project.
- You’ll receive a Preliminary Tax Credit Certificate if your application is approved. You’ll also receive an application for Final Certification. (If your application is denied, you’ll receive a letter telling you why and what you can do to appeal.)
- If project costs are less than $50,000, you should send copies of dated invoices, canceled checks or receipts that are marked “paid”. For application of Carpool, Vanpool, Individualized Travel Behavior Change, Research, Development and Demonstration or Rideshare Matching Service, please submit a report with post-project survey results. You’ll receive a Final Tax Credit Certificate in about 10 days.
- Claim the tax credit when you file your Oregon income tax return. Include a copy of your Final Tax Credit Certificate with your tax return.
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