A state tax credit for purchasing equipment to process recyclable materials is set to expire at the end of this year.
But since recycling produces many benefits to Virginia’s economy, environment, and businesses, the looming expiration date grabbed the attention of the state’s Manufacturing Development Commission.
Commission chairman Senator Frank Wagner said recycling reduces manufacturing costs.
“Certainly, it helps in reducing the raw material costs to industry across-the-board. I think with those of us that attended the meeting at the plastic bag manufacturer right here in Richmond understood the cost savings and the energy savings associated with the recycled plastic bag as opposed to drawing new raw materials.”
Dixon Hughes Goodman partner Mike Locher also proposed expanding the materials and equipment that qualify. He cited an example of recycling concrete.
“Equipment on site saved just a stunning amount of materials that didn’t go to the landfill but went into the reconstruction of the mall that sits there today.”
But lawmakers said due to harsh budget realities, they will need to find a funding source to extend the credit.
One commission member proposed conducting a cost-benefit analysis to calculate the savings to local governments when trash is recycled and diverted from their landfills. Another suggested a policy of exempting communities with ongoing recycling programs from a landfill tax—which might make it possible to tax out-of-state garbage imports. That would provide a revenue stream for extending the recycling equipment credit.