by Brianna Crandall — December 31, 2014—The American Institute of Architects (AIA) last week praised the U.S. Senate’s vote to extend the 179D energy-efficient commercial building tax deduction just prior to adjourning for the year.
AIA President Elizabeth Chu Richter, FAIA, commented, “The 179D deduction has leveraged billions of dollars in private capital, resulted in the energy-efficient construction of thousands of public and private buildings, and created and preserved hundreds of thousands of jobs. It has lowered demands on the power grid, moved our country closer to energy independence, and reduced carbon emissions.”
Section 179D provides a tax deduction for energy-efficient buildings. It also allows public building owners to allocate the deduction to the designer of energy-efficient property. In turn this permits the designer to take advantage of all the resources necessary to design the most energy-efficient property possible, while giving the building owner a tool for financing, explains AIA.
While the extension will expire again on December 31, the vote means that firms that design for public building clients can take the deduction for buildings that were placed into service in 2014, explained AIA.
The National Electrical Manufacturers Association (NEMA) and other industry groups have also indicated support for the tax deduction. NEMA called April’s inclusion of the tax deduction extension in the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act “a major win for the industry.”
Lighting manufacturer Precision-Paragon also commented in April that the $1.80 per square foot deduction encourages the installation of highly efficient interior lighting in both retrofit projects and new construction, and noted that the amendment extended this benefit to nonprofits and tribal governments. P2 also reminded that deductions like 179D allow for a break on upfront installation costs, which can be the deciding factor in green-lighting an efficiency project.
