179D Tax Deduction Saves Furniture Store Thousands of Dollars
After Gallery Furniture implemented an extensive lighting retrofit in their flagship store, EES Consulting was able to help them obtain a 179D tax deduction of nearly $110,000, accelerating the payback of the project by more than two years. Through the tax deduction and the annual cost savings of upgrading all of Gallery Furniture’s inefficient interior and exterior lighting, they will see a recoup of their investment of just over 12 months. In 2006, the Energy Efficient Commercial Buildings Deduction, or Section 179D, became available to taxpayers. This tax incentive allowed immediate deductions of up to $1.80 per square foot for energy efficient improvements meeting a predefined standard. Section 179D tax deductions apply to all qualifying updates completed between January 1, 2006 and December 31, 2014.
Partial deductions are available for lighting, HVAC and building envelope improvements at $0.60 per square foot per category. To qualify for partial deductions, energy costs must be reduced by 25% for lighting, 15% for HVAC and 10% for building envelope.
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