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      Journal of Green Building

      College Publishing

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          For several decades, we have periodically seen concern expressed about our environment and energy usage. The supply and cost of oil, the “hole” in the ozone layer, and various forms of pollution have at times also caught the attention of legislators and government officials who shape our laws. The U.S. Department of the Interior was created in 1949, and the first federal clean air act was enacted in 1955. In 1970, President Nixon formed the Environmental Protection Agency (EPA), and the first celebration of Earth Day was April 22, 1970. States have also enacted various laws over the years in efforts to reduce pollution.

          In considering ways to achieve a cleaner environment, it is not uncommon for policymakers to use tax laws to encourage environmentally-friendly behavior as well as to discourage activities that harm the environment. Increased attention to climate change in the past few years has heightened attention on the need to change our practices that lead to greenhouse gas emissions. The tax law is frequently suggested and used as a tool for helping to change behavior and reach certain environmental goals. For example, tax credits are available for certain hybrid cars, favorable tax rules exist for the production of some biofuels, and a few countries, as well as Boulder, Colorado, impose a carbon tax to help address climate change concerns.

          This article focuses on tax provisions for encouraging sustainable, environmentally-friendly building practices, both residential and commercial. While the federal government and several states have energy-saving tax incentives for individuals, such as tax credits for installing solar energy devices in their homes, tax provisions applicable to builders is the focus of this article. The rationale for using the tax law for influencing environmental behavior is covered along with examples of some current federal and state tax rules pertinent to builders. Given the inherent complexity of taxation, there are many cautions to be exercised in pursuing the use of favorable tax provisions and these cautions are covered as well. Finally, this article explores what we might expect from legislators going forward as more state and local governments impose greenhouse gas emission reduction targets and the federal government considers its role in addressing climate change and energy sources.

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          Author and article information

          Journal of Green Building
          College Publishing
          Fall 2007
          : 2
          : 4
          : 57-72
          Author notes

          1Annette Nellen, CPA, Esq. is a professor of accounting and taxation at San José State University ( www.cob.sjsu.edu/nellen_a) and a Fellow with the New America Foundation, anellen@ 123456sjsu.edu .

          2Monika Miles, CPA, is President of Labhart Miles Consulting Group, Inc. located in San Jose, CA ( www.labhartmiles.com). She specializes in state tax consulting, with particular expertise in statutory tax credits, including investment and jobs credits and enterprise zones. monica@ 123456labhartmiles.com .

          ©2007 by College Publishing. All rights reserved.

          Volumes 1-7 of JOGB are open access and do not require permission for use, though proper citation should be given. To view the licenses, visit https://creativecommons.org/licenses/by-nc/4.0/

          Page count
          Pages: 16


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