The American Institute of Architects (AIA) strongly voiced its support of bipartisan legislation that makes permanent a key energy efficiency tax incentive for owners and designers of energy efficient buildings and that expands its benefits to designers of hospitals, schools, tribal community facilities and other non-profits. H.R. 3507 introduced by Rep. Dave Reichert (R-WA) and co-sponsored by Rep. Tom Reed (R-NY), and Rep. Earl Blumenauer (D-OR) also modifies Section 179D of the tax code – the Energy-Efficient Commercial Building Deduction - to make small to midsized architect firms organized as subchapter S corporations eligible for the deduction.
The section 179D tax deduction was originally passed by Congress as part of the Energy Policy Act of 2005 and has been extended several times until it last expired at the end of 2016. A recent economic study found that nearly a million jobs over ten years and billions of dollars in annual GDP are created by this widely used deduction. This is the first time the provision has received bipartisan support for permanence.
“H.R. 3507 is a huge step in making permanent policies that allow America to move to a 21st century economy. Investing in smart, money-saving designs not only means a better bottom line for designers and building owners, but also means lower tax bills for Americans nationwide,” said AIA President Thomas Vonier, FAIA. “It also provides a big opportunity for community infrastructure projects like schools and hospitals to leverage commonsense incentives, like 179D, allowing designers to incorporate leading edge technologies that make buildings more energy efficient.”
According to data released by the U.S. Department of Energy, buildings are responsible for 75 percent of all electricity consumption in the U.S., with about half of that coming from commercial buildings. In an effort to curb this trend and encourage broader energy efficiency, section 179D allows qualifying building owners and businesses to receive an up to $1.80 per square foot tax deduction for their energy-efficient buildings placed into service during all open tax years.