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Are You Burning Up Money Without Even Knowing It?

By MarksNelson on July 2, 2015 in Articles, Joe Wondra CPA, Manufacturing Distribution, State & Local Tax
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At a recent manufacturing and distribution roundtable we spoke about  Maximizing Efficient Energy Use and Related Tax Savings.  Gary Hogsett, a Senior Energy Management Specialist with Mid-America Manufacturing Technology Center (MAMTC) and national speaker on the topic provided several ideas about how companies can reduce their overall energy costs to add profit to their bottom line.  Gary specifically addressed 4 areas of concern that business owners should look at:

  1. Air compressors.  Old air compressors are huge energy hogs and should be updated – the energy savings can be substantial.
  2. Hot water heaters are kept constantly heating water and in essence burning up money.  A switch to a tankless hot water heater can save lots of money over time.
  3. Lighting.  Switching to more energy efficient light bulbs and adding on/off lighting sensors can dramatically decrease the amount of lighting costs.
  4. Heat Exchangers are prone to malfunction and need to be routinely checked to make sure they are functioning properly as they can be a major source of heat loss.

MarksNelson provided the attendees with 2 ways to save taxes on manufacturing utility bills.

  1. Most states, including Missouri and Kansas, provide some type of sales tax exemption on utilities used in manufacturing.  Methods of calculating the exemption vary from state-to-state.
  2. For federal tax purposes, companies who make energy-efficiency expenditures related to lighting, heating, cooling, ventilation, and hot-water systems, or to their building envelope, may qualify for a Section 179D deduction.

If you have questions regarding the energy efficiency of your company let us know.  I’m sure Gary would be glad to check things out with his thermal imaging gun!

Joe Wondra

About the author

Joe Wondra specializes in working with manufacturing companies. He provides solutions to help his clients minimize tax burdens, increase cash flow, and maximize profits.


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MarksNelsonView all posts by MarksNelson
MarksNelson LLC works with clients to help safeguard and grow their businesses. Our ultimate goal is to help our clients to Move Forward. The firm provides Assurance, Accounting Services and Business Advisory, Business Valuation, Consulting, Cost Segregation, Employee Benefit Plan Audits, Litigation Support, Forensic Accounting, International Tax, State and Local Tax and Tax planning, advisory and compliance services. MarksNelson is a member of The Leading Edge Alliance, the second-largest international professional association of independently owned accounting and consulting firms, serving clients who need additional resources on a national or international level. MarksNelson has significant accounting and business advisory experience in the auto dealership, construction, insurance, manufacturing, distribution and real estate sectors. The firm was named among the 2014 Best Accounting Firms for Leadership Equity by the 2014 Accounting MOVE Project for its dedication to gender equity.