Tax Legislation Update - The Green Building Deduction
Green Energy Savings: Knowing How to Build Green and Save
One of the most exciting pieces of tax legislation that has passed in recent years is Section 179D, “The Green Building Deduction.”
A tax deduction of up to $1.80 per square foot is available to owners of a new or existing commercial building. The most exciting piece of this legislation is that it is available to the primary designer (ARCHITECTS AND/OR ENGINEERS) in the case of a publicly owned building. The building must be constructed or retrofitted to save at least 50% of the energy costs compared to ASHRAE Standard 90.1-2001. Eligible commercial buildings include but are not limited to offices, retail buildings, warehouses, rental housing of four stories or more, publicly-owned buildings, and even parking garages.
Each of the three energy using components of the building –envelope, lighting, and HVAC – is eligible for one third of the incentive ($0.60 per square foot) if it meets its share (16 2/3% per component) of the whole building energy cost savings goal.
Commercial building compliance is determined by third party inspectors who review the plans and the actual construction. Energy cost savings are determined by software that must be certified by the Department of Energy as meeting criteria of consistency and accuracy.
The incentives apply to buildings or systems placed in service or remodeled during calendar years 2006 – 2013.
Do you think your building or a building you designed might qualify for the green building deduction? Contact me, Scott Warren at Scott.Warren@warrenaverett.com or 251-943-8571.