Parking Garages and Tax Deductions Under Section 179D

It is a known fact that tax incentives are offered for owners of buildings who are energy-efficient. However, many people don’t know that Parking Garages are also included in building category of Section 179D, and the federal government has clarified this issue in the IRS Notice 2008-40 Sec.6.
As a result, building and parking garage owners have the opportunity to save money on their investment by implementing energy efficient lighting retrofits in their buildings.

Commercial Garages

Garage owners or garage/tenant management firms can become eligible for the tax deduction by installing energy-efficient lighting. The commercial garage owners include airport garages, city garages, apartment buildings, department stores, office buildings, and hotel garages.

Government-Owned Garages

When it comes to government-owned garages, the owner can reap a larger economic benefit by requesting that the designer of the garage lighting systems keep long-term energy savings in mind. In this case, tax beneficiary would be the designer, and not the government entity itself. The designer of the parking garage’s lighting system would earn a one-time tax incentive for designing the energy efficient facility (great news for designers). But the cost of the running the building would be reduced, helping the government entity and the tax payers.

Time to Act Now!

The economic payback is convincing enough that garage owners all over the country are moving quickly to benefit from tax incentives, thanks to Section 179D. The overall benefits – apart from the benefit of tax deduction – are too lucrative for garage owners to delay their course of action.
The federal government hasn’t only provided a great opportunity in the shape of tax savings for energy-efficient lighting retrofits in buildings, but it has issued a special notice that parking garages also qualify for the tax incentive.
Garage owners should take steps to carefully consider leveraging this opportunity in their short as well as long-term business planning.