How Recycling Helps the Environment with Tax Breaks for Companies

Recycling remains one of the most effective ways for businesses to reduce their environmental impact, conserve resources, and support sustainability efforts. And while the financial incentives for recycling vary, there are real opportunities to reduce costs through state tax credits, equipment exemptions, energy-related grants, and more—especially for companies that invest in modernizing their waste management systems.

Below, we’ll highlight some of the key ways corporate recycling programs can positively affect your bottom line—from potential tax benefits to improved public perception.

A Closer Look at Existing Business Tax Breaks for Recycling

Businesses looking to improve their recycling efforts may find a range of financial incentives available at the state and federal levels. While there is no dedicated federal business tax credit for recycling, companies may be able to recover costs through general business tax provisions—such as Section 179 expensing or depreciation of qualifying equipment—and through select clean energy credits for systems that overlap with energy conservation.

At the state level, however, many recycling-focused programs do exist. These can include tax credits for recycling equipment purchases, sales or property tax exemptions, and grant programs that support sustainable business practices. Eligibility requirements vary, but for businesses investing in qualified recycling programs, these initiatives can significantly reduce upfront costs and support long-term savings.

State Tax Incentives for Recycling and Waste Management

Many states offer valuable tax incentives, or tax breaks, for businesses to encourage recycling and responsible waste management practices. These programs are typically designed to support capital investment in recycling equipment, infrastructure, and job creation in green industries.

Business Income Tax Credits

Some states, such as Virginia, provide tax credits to corporations that purchase qualified commercial recycling equipment. In Virginia, for example, businesses may receive a credit equal to 20% of the purchase price, with unused amounts eligible for carryover up to 10 years.

Property Tax Exemptions

States like Nevada, Iowa, North Carolina, and Louisiana offer property tax exemptions for commercial recycling equipment or pollution control equipment. These exemptions can significantly reduce ongoing costs for businesses that recycle materials such as cardboard, plastics, metals, or wood.

Sales Tax Exemptions

In some states, businesses may also qualify for sales and use tax exemptions on purchases of commercial recycling equipment. For example, North Carolina offers exemptions to companies that meet specific criteria, including those designated as major recycling facilities—a designation that requires at least 250 full-time jobs. States like Iowa and New Jersey offer similar exemptions to support businesses that process, manufacture, or distribute recycled products.

Because these incentives are highly state-specific and may change from year to year, it’s best to consult your state’s Department of Revenue or Environmental Protection Agency, or a qualified tax professional, for the most accurate information about eligibility.

Other Benefits of Recycling for Your Business

Not all the increased profit from recycling comes from government rebates and credits. When consumers know a business recycles and disposes of their waste in an eco-friendly manner, it improves their opinion of that business. Most consumers report that they prefer to do business with eco-friendly companies.

Your customers appreciate the importance of commercial recycling and waste reduction, and these essential benefits of recycling:

Recycling paper saves trees and conserves natural resources.
Reusing or recycling glass bottles saves energy and raw materials.
Recycling aluminum cans saves energy and reduces the amount of mining for bauxite.
Composting organic waste helps reduce greenhouse gases and carbon dioxide emissions from landfills.
Recycling improves economic security and creates new jobs and manufacturing opportunities without depleting existing natural resources.

Stacked coins with a plant growing out of the top

Resources for Businesses Exploring Tax Breaks and More

Whether you’re looking to explore tax incentives or understand the broader impact of recycling, the following resources can help guide your next steps:

For detailed, personalized advice about your business’s eligibility and tax planning, consult a licensed tax advisor.

GTS: Your Guide for Commercial Sustainability Initiatives

Understanding the benefits of recycling is just the start—putting them into practice can lead to real savings. If your business is using outdated waste equipment or inefficient sorting processes, upgrading your systems can cut costs and improve performance.

At Global Trash Solutions (GTS), we offer nationwide waste brokering, waste consulting, and sustainability consulting services to help businesses modernize their waste systems. Our team can perform a detailed waste audit, identify opportunities to reduce contamination and improve recycling rates, and recommend solutions that align with your operational and financial goals.

When it’s time to upgrade waste equipment, we offer access to commercial and industrial-grade recycling and waste management systems for operations of all sizes.

Ready to take the next step? Contact GTS for a free consultation at 866-760-8194.