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Commercial Building Tax Deduction

The Energy Policy Act of 2005 included a new tax incentive, backed and advocated by NEMA, to improve the energy efficiency of commercial buildings. The "Commercial Building Tax Deduction" establishes a tax deduction for expenses incurred for energy efficient building expenditures made by a building owner. The deduction is limited to $1.80 per square foot of the property, with allowances for partial deductions for improvements in interior lighting, HVAC and hot water systems, and building envelope systems. The provision is effective for property placed in service from January 1, 2006 through December 31, 2013.

NEMA is leading a broad-based coalition of business, trade, government, energy efficiency, and other groups and organizations. The Commercial Building Tax Deduction Coalition is working to ensure the provision is implemented smoothly and to promote awareness and information about its benefits, as well as energy efficiency improvements in commercial buildings.

PDF Letter (April 14, 2010) sent to Congress to urge increase to $3.00 signed by more than 80 organizations

PDF NEMA's Guidance on Energy Policy Act Commercial Building’s Tax Deduction Certification Letters.

NEMA has issued a guidance document for the certification letter that is required in order to claim the IRS Section 179D tax deduction. The certification letter must be signed by an engineer or contractor who is licensed in the jurisdiction in which the building is located and represents himself as being qualified to do this type of building analysis. The NEMA guidance document provides sample language and examples.

To learn more about the Energy Efficient Commercial Building Tax Deduction, please visit: www.efficientbuildings.org


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