Foss & Company’s research and analysis on trends in the tax equity market confirms that while a number of leading corporations are participating in this $20 billion annual tax equity market, tax equity remains an under-utilized tool for companies seeking to deploy thoughtful and strategic tax strategies. An analysis of public companies in the Russell 3000 Index found that approximately 61% were qualified tax payers that could have benefited from utilizing a credit strategy, yet less than fifty companies disclosed taking advantage of credit programs in meaningful volumes. This lack of participation resulted in over $400 billion of underutilized or inefficient tax liability that could have supported programs for affordable housing, historic preservation, or renewable energy projects and brought billions of dollars back to the companies and their shareholders. Our study found that the Low-Income Housing Tax Credit (LIHTC) and Renewable credit programs (the Production Tax Credit [PTC] and the Investment Tax Credit [ITC] remain robust and vibrant markets and can serve as viable outlets for corporations seeking to strategically manage their effective tax rate and create shareholder value.

This whitepaper intends to shed light and deliver broad insights into the opaque and often unfamiliar US tax equity market for US federal allocated credits and is intended for corporate tax and finance professionals.

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