Air Pollution Control Equipment Tax Exemptions



Posted: Tuesday, December 14, 2010

by Scott Manes
American Environmental Fabrication & Supply,LLC

Many states within the United States are now offering tax exemption certificates on air pollution control equipment, however most states will require:
• That the equipment is designed and operated primarily for the control, capture and/or removal of pollutants from the air,
• is suitable for the application and reasonably adequate, and
• meets the intent and purposes of the Tax Exemption

Often times the state will require the evaluation of the air pollution control equipment covered by the application to determine that the equipment meets the definition of an air pollution control facility. This definition is mean equipment installed or acquired for the main purpose of controlling or disposing of air pollution which, if released, would render the air harmful or injurious to public health or to property within the state. This includes process alterations made to production equipment so as to satisfy the requirements of the air pollution act and to the fuel burner of a fuel burning system which has been installed, modified, or converted to effect air pollution control.

Some equipment may be exempted from the referenced definition as any air pollution control equipment acquired or installed for the benefit of personnel or of a business.

Generally, equipment which meets the definition of an air pollution control facility as falls under one of the following categories:

1. Equipment which in effect removes air contaminants from a gas-stream being exhausted to the atmosphere (e.g., bag Houses, scrubbers, electrostatic precipitators, etc.)

2. Equipment which prevents potential air contaminants from being emitted to the atmosphere (e.g., regnerative thermal oxidizer, dust management enclosures, etc.)

3. Equipment which changes the sources, thus eliminating the generation of the air contaminant (e.g., process change or burner conversion)

4. Equipment which is less significant to the operation of the air pollution control facility (e.g., dust hoppers, waste conveyors, monitors, stacks, fans and motors)

When you are evaluating your specific equipment installation, most States use these general guidelines to determine whether a piece of equipment will meet the definition of an air pollution control facility. It is important to remember that:

1. Exceptions to your State Guidelines may occur,

2. Air pollution control facility means air pollution control equipment installed or acquired for the primary purpose of controlling or disposing of air pollution,

3. "Air pollution control facility" does not mean equipment which is for benefit of personnel or business,

4. For difficult situations in which the equipment serves a number of functions, only one of which is air pollution control, the State may apply an incremental cost approach. In such situations, the incremental cost acceptable for tax exemption is considered to be the difference between the actual cost of the equipment (e.g., regenerative thermal oxidizer ).and the projected cost of the equipment which could perform all of the functions other than air pollution control.

For more information on specific equipment covered under most State guild lines, please visit: Tax Exemptions for Air Pollution Control Equipment
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