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The
Energy Efficient Commercial Buildings Tax Deduction for Lighting
Systems Click
here to see additional details
published on June 2, 2006 per Department of Treasury notice # 2006-52.
The energy efficient commercial buildings
deduction provides a deduction for building owners equal to
energy-efficient commercial building property expenditures made by the
taxpayer, subject to a cap. See table to the left to download a
spreadsheet that can be used to estimate the tax and energy benefits for your
specific situation. Spreadsheets were last uploaded on March 26,
2008.
NOTE: it is best to save the spreadsheet onto your harddrive before
using it and you may have to reduce the macro security in your Excel
to medium to use this spreadsheet.
- A tax deduction is available up to
$1.80/sq.ft. for energy efficient commercial buildings that improve
on
ASHRAE/IESNA 90.1-2001 energy costs by 50%.
Space-by-Space values -
Whole Building Values. Note 2001 values are the same as 1999.
- Alternate system-specific deductions
are available for interior lighting, HVAC and building envelope -
each system up to $0.60/sq.ft.
- An interim rule for the
system-specific deduction for lighting provides for a deduction for
interior lighting systems with power density at least 25% less than
prescribed by ASHRAE/IESNA 90.1-2001. This deduction increases in a
linear fashion to $0.60/sq.ft. for systems that are at least 40%
less. Warehouses may only qualify for the deduction if they are at
least 50% less than ASHRAE/IESNA 90.1-2001.
- The system-specific deduction for
lighting can apply to new construction or lighting renovations for
any building located in the United States that is within the scope
of ASHRAE/IESNA 90.1-2001.
- Certain lighting level and lighting
control requirements must also be met in order to qualify for the
partial interim lighting deductions.
- The provision is effective for
property (or renovations) placed in service after December 31, 2005
and prior to January 1, 2008. [NOTE: In October 2008, these
deductions were extended to December 31, 2013.] The tax deduction is claimed one time
for the year in which the property is placed in service. The
deduction cannot exceed the capital expenditure for the energy
efficient lighting system and will reduce the cost basis of the
equipment for depreciation purposes.
- All energy reduction projects
submitting for EPAct deductions must be certified by a 'qualified'
individual. Click here for a list (maintained by the National Lighting Bureau) of
self-qualified individuals, state-by-state.
- For public entities such as public
schools, hospitals or government offices, the deduction may be
allocated to the person primarily responsible for designing the
property.
The Department of Energy and the Internal
Revenue Service will be defining specific details regarding tax guidance
and compliance software in the near future. There will also be
additional information regarding who is deemed qualified to certify
building efficiency as well as the IRS deduction forms.
Additional information regarding The Energy Efficient Commercial Building Tax
Deduction can be obtained at
www.efficientbuildings.org.
The above summary is meant to provide a general overview of the tax
provisions of the Energy
Policy Act 2005. Please contact your tax advisor to determine the
specific tax treatment
appropriate for your company.
----------------------------------------------------------- Notice 2008-40 has been issued
providing additional clarification on the followings issues:
- The assignment of the tax deduction to
designers for government-owned buildings.
- The list of approved software programs for
certifying under the permanent rules.
- Certification requirements under the interim
lighting rule.
- Application of the interim lighting rule to
unconditioned garage spaces.
- Changes relating to partially qualifying
property.
Click here for a full
copy of Notice 2008-40.
Click here for a
summary of Notice 2008-40. |
