On the heels of the record-setting incentive package of more than $1.5 billion in grants and tax breaks from New York state that Amazon stands to get for bringing at least 25,000 workers to a new campus in Queens, New York Gov. Andrew Cuomo was quoted as saying, “All things being equal, if we do nothing, they’re going to Texas.”
There is no shortage of famous movie quotes in the lexicon of pop culture, and the phrase “You complete me” uttered by Tom Cruise in the film Jerry Maguire certainly belongs somewhere at the top of the list. While expressed with complete sincerity in the film to his love interest, the phrase has enjoyed longevity having been oft quoted, sometimes as a comedic device, such as in the film Austin Powers and the TV show The Office, and in the deranged rantings of the villainous Joker in the Batman film The Dark Knight.
The Protecting Americans from Tax Hikes Act, known as the PATH Act, protects taxpayers against fraud. Some components of the act have expired, but there are still many active components that could benefit your business.
Some people choose to implement energy efficiency changes into their homes and buildings solely out of concern for the environment. However, there are many cost-saving benefits that when outfitting a green building.
Most design firms in the A&E industry are focused on form and function of the buildings they create. Within this thought process is how to design and build structures with the most energy efficiencies as possible through the utilization of the latest technologies, materials, techniques, etc.
Is your company aware that certain tax incentives expired within The Protecting Americans from Tax Hikes Act, known as the PATH Act? However, have no fear, there are still many components that are still active.
Even though parts of the PATH Act expired, on the whole, green building tax incentives remain an important tax savings strategy for businesses. In direct proportion to the growing efforts to reduce energy consumption, companies that own commercial or industrial property will continue to need insight and guidance on green building incentives.
The section 179D deduction provides benefits for businesses, architects, engineers and contractors when they build or renovate a building that is energy efficient. In addition to the 179D deduction, the 45L tax credit also is not applicable in 2017. The 45L tax credit was applicable when building units provided a level of heating and cooling energy consumption that is lower than national energy standards. However, the good news is any project placed in service prior to 1/1/2017 is still eligible to have a 179D or 45L study conducted.
There’s no refuting it: Green building incentives are on the rise. As more programs are offered to incentivize businesses to become more energy efficient, the time is ripe for taking advantage of these tax benefit programs.
To truly maximize your green building tax benefit with minimal obstacles along the way, you definitely do not want to launch into claiming these benefits without establishing a proper process. Too often business either don’t capture as many benefits as they could, or worse, are audited due to unsubstantiated claims.
The recently passed PATH Act includes a two-year extension of the Energy-Efficient Commercial Building Deduction, also known as section 179D of the tax code. This is largely due to growing awareness that the 179D deduction is a vital benefit for businesses.
“By extending 179D tax deduction, Congress has done architects, engineers and contractors a major favor as we have seen firsthand how this incentive has helped companies expand both their workforce and the scope of their services,” said Dean Zerbe, alliantgroup national managing director and former senior counsel to the U.S. Senate Finance Committee, in a recent article published by Proud Green Building.On the whole, green building incentives are becoming an increasingly important tax savings strategy for businesses. In direct proportion to the growing efforts to reduce energy consumption, clients of your CPA firm that own commercial or industrial property are going to ask for more insight and guidance on green building incentives.
Perhaps you have a lot of fixed asset additions each year that include a variety of tangible personal property and real estate assets, but are unfamiliar with or not particularly savvy in the ways of cost segregation. Or, perhaps your business is finally emerging out from under the recession’s thumb or you’re a thriving startup that’s recently become taxable and may now reap the rewards of cost segregation and broadened real estate tax strategies.
Whether or not you’ve done cost segregation historically for your business, you likely understand that you’ll need help conducting a solid cost segregation study – one that captures and substantiates the maximum allowable deductions.
Although the final regulations are most significant for fixed asset intensive industries (i.e. electric utilities, telecom, retail, etc.), or real estate property owners that consistently incur capital expenditures to maintain their facilities, small business owners are also seeing some advantages from certain aspects of the Tangible Property Regulations.
Small businesses like yours are able to deduct many expenditures immediately and accelerate the depreciation on others, rather than spread them out over a longer period of years as annual depreciation deductions.