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U.S.-based companies have many questions related to energy tax incentives and are dealing with many tax headaches; however, this doesn’t mean that the government doesn’t support the development of eco–friendlier, energy-efficient buildings. On the contrary, the federal government is still offering tempting incentives to designers and builders who decide to think big and green by getting involved in construction or remodeling work meeting current standards.
If you are a professional working in this sector you should know that you could become eligible for two important and extremely underutilized financial rewards, known as R&D tax incentive (research and development tax benefit) and section 179D, widely known as the Energy Efficient Commercial Building Deduction.
The Senate Finance Committee has recently passed a new legislation that extends a few expired tax benefits for businesses and individuals, including Section 179D and R&D tax incentive. This is obviously excellent news for builders, contractors and designers who wish to play the energy efficiency card to profit from substantial incentives allocated by the U.S. government. The best part is that both types of tax incentives will be retroactively extended until the last month of 2015; moreover, it seems that in the near future these tax benefits could become permanent, stimulating an even greater number of developers to follow the same trend and build or remodel greener constructions.
According to Forbes, the provisions will support job growth all across America and encourage a wide range of innovations implemented by designers, architects and contractors who are looking forward to making the most of every single tax break that they can qualify for.
How Does R&D Work?
R&D tax incentive is a benefit allocated to businesses of all sizes that manage to improve a technique, product of process. It represents one of the most consistent incentives provided by the government. It first came into effect in 1981 and got extended no less than 15 times. Contrary to popular belief, you don’t have to spend all your time in a secret laboratory testing and improving different breakthrough formulas to become eligible for the R&D tax incentive. As a matter of fact, this tax incentive is associated with applicable science. This tax credit basically rewards constructors who come up with ingenious, feasible solutions to a wide range of design challenges.
How Does The Benefit for Green Buildings Work?
Section 179Dtax incentive,also known as the green tax benefit allows designers, contractors and architects to profit from considerable monetary advantages when they construct or remodel greener, energy-efficient commercial buildings on U.S. territory. The deduction varies a great deal based on the scope and the size of the commercial building; however you should know that the maximum value that one could reach when it comes to cashing in the green benefit is 1.80 dollars/square foot. For instance, a company that renovated a stadium by adding energy-efficient features like glazed panels and non-water toilets managed to collect almost $300,000 in tax benefits.
You could be next in line for such substantial incentives. If you have a question regarding R&D or Section 179D, just give us a call. At Claris Energy, we do everything in our power to help businesses implement the simplest, most profitable green energy solution.
Steve Nanos
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