Building Tax Deduction

Energy-Efficient Commercial Building Tax Deduction

The Energy-Efficient Commercial Building Tax Deduction is an important financial incentive, giving a break to building owners and designers to at least meet (and preferably exceed) the energy reduction requirements of old and new constructions.

The tax reduction above received authorization from the Energy Policy Act of 2005 (P.L. 109-58) for the expenses that business owners incur in qualified energy-efficient building investments. In the case of buildings under government ownership, the government may choose to allocate the deduction to whoever is responsible for designing the qualified improvements. The deduction can occur within the year in which the energy-saving improvements begin servicing the building.

Through the Consolidated Appropriations Act, 2016, the tax deduction had an extension until December 31, 2016. Later, in January 2018, there was an amendment to the Extension of Energy-Efficient Commercial Buildings Deduction by changing the date to December 31, 2017. The provisions authorizing the tax reduction are under the 26 U.S.C. § 179D.