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Tax Incentives
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
Twenty-five states around the country use some type of tax incentive or credit to promote recycling market development. The large majority of states offer tax incentives for purchasing recycling equipment—either income, sales, or property tax credits. These tax credits range from 10 to 50 percent of equipment costs. As an alternative, Delaware offers a fixed amount of money ($500) for each $100,000 invested in recycling equipment.
Restrictions often apply to the incentives. Arizona, for example, requires that the equipment process postconsumer solid waste or produce material that is made from at least 25 percent recycled materials. Other states limit the credits to targeted commodities such as paper or plastic. Some states, such as Montana, offer tax credits based on tiers; different levels of credit are offered depending on the amount invested in the equipment.
Tax incentives can take several other forms, as well. Some states offer sales, real, or property tax exemptions on construction and renovation of recycling facilities. One state offers an employment income tax credit of $500 for each new employee added as a result of incorporating recycled products into the process. Another state offers an income tax credit to individuals who purchase a product made from recovered materials.
This page provides information on available tax incentive programs, including:
- State Recycling Tax Incentives
Descriptions of each state’s recycling tax incentive as well as eligible applicants.
- Tax Credits: An Incentive for Recycling? (PDF) (4 pp, 33K, about PDF)
An article by Kathern Sparks from Resource Recycling magazine that compares the programs and effectiveness of state tax credits for recycling. Please note this article was published in the July, 1998, issue and thus some information may be out of date.
