Brownfields Tax Incentive
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NOTE: The Federal Brownfields Tax Incentive sunset on December 31, 2011. Congress has not renewed the Brownfields Tax Incentive. Therefore, the tax incentive cannot be claimed for tax years beyond 2011.
Originally signed into law in 1997 and extended through December 31, 2011, the Brownfields Tax Incentive encourages the cleanup and reuse of brownfields. Under the Brownfields Tax Incentive, environmental cleanup costs are fully deductible in the year incurred, rather than capitalized and spread over time. Improvements in 2006 expanded the tax incentive to include petroleum cleanup.
- Brownfields Tax Incentive Fact Sheet, December 2010 (PDF) (2 pp, 193K)
- Brownfields Tax Incentive Guidelines (PDF) (5 pp, 87K), November 2008
- Brownfields Tax Incentive Frequently Asked Questions
The success of many brownfields cleanup and redevelopment projects depends on the ability of developers and investors to craft a financing package that leverages numerous sources of funding available from a variety of sources. Taking advantage of federal, state and local tax incentives and credits allows a brownfield developer to use resources normally spent to pay taxes for other purposes. This can help site redevelopers save the cash needed to address contamination issues. The extra cash flow resulting from a tax break also can improve a projectís appeal to lenders. Federal tax credits and incentives often are an important part of the mix.
The following guide provides an overview of the key federal tax incentives and credits that can be leveraged for brownfields cleanup, redevelopment and reuse.