The Emergency Economic Stabilization Act of 2008 (HR-1424), signed on October 3, 2008, extended the benefits of the Energy Policy Act of 2005 through December 31, 2013. This Act creates multiple incentives for construction projects to include environmentally friendly components. What does that mean to you as a contractor? It means there may be financial benefits for using environmentally friendly components in construction design plans and perhaps more importantly, you may actually have time to market these concepts to potential clients.
The Energy Policy Act of 2005 created a tax deduction of up to $1.80 per square foot (of entire building) available to owners or tenants of new or existing commercial buildings that are constructed or modified to save at least 50% of the heating, cooling, ventilation, water heating, and interior lighting energy cost of a building that meets ASHRAE Standard 09.1-2001. In the case of government owned buildings, designers are also eligible for this deduction.
A partial deduction of $.60 per square foot is available if improvements are made to any one of three building systems that reduce total heating, cooling, ventilation, water heating and interior lighting energy by a specified percent – the building envelope (10%), lighting (20%), or heating and cooling system (20%).
The tax deductions discussed above are for the benefit of the party paying for the construction. The deduction can be taken in the year the property is placed in service. To qualify for the deduction the building or system must be tested and inspected to confirm compliance with the energy cost savings goal according to guidance issued by the IRS in consultation with the Department of Energy.
Construction contractors should take the time to familiarize themselves with the commercial building tax deductions discussed above. Dean Dorton Ford, PSC has thirty years experience helping clients understand the various tax laws impacting their industry. Our construction team devotes significant time to researching and applying the tax laws for contractors and related services. We would be happy to assess the benefits that this deduction may provide you and your customers.
For more information please contact,
Justin Hubbard
jhubbard@ddfky.com
859.425.7604
