Real Estate Journal — ODM — POA Expo 2018 — March 30 - April 12, 2018 — 11B
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POA E xpo 2018
By George Crawford, Green Partners The EPAct 179D Energy Tax Incentives are Alive and Well
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First of all what are the EPAct 179D Tax Incentives ? And sec-
savings targets are set at very low levels for this program, so as a result almost any LED lighting upgrade will trigger the maximum benefit. As for a specific example as to how this program works, take a 100,000 sf warehouse which initiates a LED lighting retrofit. This retrofit triggers the $1.80 per square foot tax benefit, which in this example totals $180,000 in potential tax deductions. Here the LED retrofit which triggered the tax benefit cost $50,000.00, so the $50,000 is deducted from the $180,000 and is then taken as a tax deduction.
ergy simulation model, third party certification and a 150 page report. While most CPA firms are not set up to address these requirements, there are a small group tax service pro- viders that have the qualifica- tions and computer capability to meet these requirements and can coordinate the re- quired tax preparation with your own tax provider. All that is needed are the details or drawings of a building’s lighting, HVAC or building envelope project. Most of these tax service providers will review your project data on a complimentary basis. To
proceed with the actual docu- mentation work for the tax filing, there is a fee which is usually a small percentage of the tax savings realized. One example of a well established tax provider specializing in this work is Energy Tax Sav- ers. Their web site www.ener- gytaxsavers.com contains ad- ditional helpful information with regard to EPAct179D including an on-line Webinar. On a related note - throughout this article there is reference to the fact that a LED lighting retrofit triggers these tax ben- efits. This is not a random or continued on page 16B
The remaining balance of $130,000.00 is then available for other qualifying projects. You are allowed to go back ten years and identify past qualifying projects for the re- maining balance – in this case up to the remaining balance of $130,000. The present extension of EPAct 179D is extended through December 2017. So to take advantage of this exten- sion, review projects starting in Jan 1, 2006 through 2017. In terms of the actual IRS submission itself, don’t be put off by the filing require- ments which include an en-
ondly, who w o u l d b e the best can- d i da t e s t o benefit from these incen- tives? A n s w e r F o l l o w s : The s e Tax
George Crawford
Incentives revolve around the installation of energy efficient lighting, HVAC systems and building envelope projects. The tax benefits, which can be very significant, are avail- able to owners of commercial buildings or tenants that own the lighting and HVAC sys- tems in commercial buildings. These benefits are also avail- able to hotels and apartment buildings as well as parking garages. The benefit itself comes in the form of a tax deduction, so for this benefit to work, the recipient must be able to utilize tax deductions on their income tax returns. For those that can use tax deductions, this tax incentive is significant and well worth the follow up.. In addition to owners of commercial buildings or ten- ants that own the lighting and HVAC systems, these tax benefits also extend to primary designers - such as architects, engineering firms, energy services companies and contractors if they have worked on any federal state or local government building energy efficiency projects. To move on to more of the specifics, one of the more fa- vored categories for the EPAct 179D tax incentive are indus- trial buildings. Manufactur- ing buildings or warehouses are advantaged under this tax law since even a basic LED lighting retrofit project will trigger the full $1.80/sq.ft. tax deduction benefit. Parking ga- rages are another advantaged category, but are limited to a $0.60/sq.ft benefit for their interior lighting systems. Hotel s and apartment buildings (again as long as they can utilize these tax de- ductions) are also good candi- dates for the EPAct 179D tax incentive program. If a Hotel or Apartment installs a new central HVAC system or LED lighting, it has an excellent chance of qualifying for the full $1.80/sq.ft. The energy
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