“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. …
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. …
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.” “Walmart, others make money on Oregon’s energy tax credits” h/t Climategate