When an attorney is in their very first year at law school, they have yet to come in contact with the world of taxation. When they are taught taxation, the first message conveyed by professors is that any person who is a taxpayer will want to take advantage of every lawful tax deduction and credit that they are able to find. Nobody likes to pay taxes; giving part of your hard earned money to the state (or anyone for that matter) is not easy. Hence, people look for deductions and credits to ensure they have to pay the least amount they are legally required to pay.
A Welcome Relief for Building Owners
For owners and builders of commercial buildings, one such deduction is the tax code section 179D also known as Energy Efficient Tax Deduction. This tax provision is a tool that most commercial building owners can make use of, and potentially save thousands of dollars in tax bill. Some contractors that have made use of this provision have generated hundreds of thousands and even millions of the tax deductions. It is a welcome relief for builders and commercial building owners as long as their buildings meet certain energy efficiency standards.
Designed to Give You an Advantage
If you are able to comply with the energy efficiency requirements, you can enjoy a tax deduction of $1.80 per square foot. The world is becoming more and more conscious towards the environment and the care that it needs. The recently concluded Paris Conference and the steps by governments all over the world including that of the US are there for all to see. This provision made part of the IRS tax system back in 2006 is a step in that direction.
If you are a commercial building owner, using Section 179D offers a double advantage. Not only are you able to comply with the requirement and earn a sizable amount of deduction on your cost of construction, you will also be able to make a service to the environment. To be able to apply for the tax deduction you need to have reduced your building’s energy consumption by 50% when compared to the current standard building model. This means you not only help the environment in terms of long-term decrease in carbon emissions, but you are also reducing your energy bill significantly.
Commercial buildings are designed to earn optimize profits, and section 179D allows for just that.