Are you taking advantage of all the green building incentives available to your business?

In the past several years, Congress and recent administrations have placed a huge emphasis on green building initiatives. In order to counter problems that we are facing in energy, Congress passed the Energy Policy Act of 2005 that created a tax incentive that relates to the design and installation of energy efficient interior lighting, HVAC, hot water, or building envelope systems in commercial buildings. Through this incentive found in section 179D of the Internal Revenue Code, qualifying businesses can receive up to $1.80 per square foot in deductions for eligible projects placed into service any time from 2006 to 2020.

Who can qualify?

The deduction is available to building owners and lessees who make the energy efficient improvements to their commercial buildings including:

  • Retail Buildings
  • Office buildings
  • Industrial buildings
  • Apartment buildings (at least 4 stories)
  • Warehouses

In addition, designers of government-owned buildings can also get the benefit under a special rule for public property!

Eligible designers include architects, engineers, contractors, environmental consultants or energy services providers who have contributed towards the energy efficiency for new government buildings or renovations/retrofits/additions of existing
government buildings such as:

  • Schools & State Universities
  • Libraries & Town Halls
  • Airports & Transportation Facilities
  • Post offices & Government offices
  • Courthouses, Military bases…and other

Potential Tax Deductions For…

Size of Improvement Lighting HVAC Envelope Full Tax Deduction
50,000 sf $30K $30K $30K $90K
100,000 sf $60K $60K $60K $180K
300,000 sf $180K $180K $180K $540K