Energy Policy Act of 2005
The Energy Policy Act of 2005 provides a tax deduction of up to $1.80 per square foot as an immediate tax deduction for capital improvements that reduce energy consumption. Building investments, including energy management systems, that achieve specified energy cost reductions beyond ASHRAE 2001 building energy code standards are eligible. There are three subsection tax deductions that comprise the total allowable deduction. They are:
1. Energy management systems, Lighting & Lighting Controls -Allowing for a maximum of $.60 per square foot for lighting and lighting controls.
2. HVAC Controls – Allowing for a maximum of $.60 per square foot for HVAC (heating ventilation and air conditioning) controls.
This amount equals a deduction of up to $ 1.20 per s.f. for upgrades such as energy management systems, even hotel energy management systems.
3. The balance of the $ 1.80 per s.f. deduction is embodied in building envelope upgrades that improve the energy efficiency of the envelope itself.
The incentives apply to buildings or systems placed in service or remodeled during calendar years 2006-2013. The cost of installation of the energy management system may possibly be offset by a deduction of up to 60% based on the typical hotel room. Hotel energy management will continue to pay off over the coming years beyond the payback. By installing the hotel energy management system you may realize up to a total offset of the cost as a result of the allowable tax deduction.
Disclaimer: We are not tax advisors and make no claim as to what your actual savings from tax incentives may be. Consult a professional Tax Advisor to determine the actual impact on your property.
Sorry, the comment form is closed at this time.