Engineering economic analysis
Introduction
Taxes
Chemical production facilities are subject to the same financial levies by the government as all corporations. Specifically, corporations typically pay income taxes, and may collect incentives based on state and federal regulations. Detailed tax filings are almost always conducted by the accounting or financial department of a corporation. When preparing process economics estimations, taxes should be included, however all final cost estimates reported to management should be prepared by the appropriate specialist (Douglas, 23).
Corporate Taxes
The specific tax codes will vary from state to state, and from country to country (Peters, 303). The common factor will be that income is taxed at marginal rates. In the United States, this percentage is 35%, although the effective rate may be lower.
Corporate income taxes is a yearly expense. The percentage rate is to be applied on the income, not the revenue. See other Economics sections on the difference between income and revenue.
Investment Incentives
Local, state, and federal governments generally encourage capital investments by corporations. Financial incentives afforded to corporations include low interest loans, free capital for research and development, and tax holidays for new technologies.
When conducting economic estimates of a chemical process plant, especially if the plant utilizes efficient or "green" technology, it is important to investigate any and all sources of government incentives.