Business owners have a lot of expenses so it’s nice when we get a break especially on commercial roof maintenance. In 2017 congress approved Section 179D of the tax code allowing a commercial building owner to deduct the full cost of replacing or repair of the commercial roof the year the roof replacement happens. Tenants of commercial buildings can also use U.S. Code 179D and this also means that if there is a full replacement of a commercial roof and the energy efficiency is improved by 50% then at a maximum $1.80 per square foot can be applied as a tax write off for that year.
Who can Benefit:
- Owners and tenants of commercial properties that have installed eco friendly roofs.
- General contractors or engineers that are the designers for a new building that has an energy efficient commercial roof.
The tax deduction is intended to incentify projects that put forth “green” building maintenance efforts. The type of buildings that are eligible are retail buildings, offices, parking garages, residential buildings that are four stories or higher(apartment buildings), government buildings, warehouses, and other industrial buildings. Energy and power cost reductions are required in order for business owners to benefit and receive up to $1.80 per square foot in deductions on their commercial roof restoration project; the maximum a business can deduct for Section 179D is $1 million
The deduction is based only upon calculations with energy efficiency in mind and applies to commercial buildings constructed between 2006 and 2013. Prior to Section 179D the roof was depreciated over a period of 39 years and deducted annually. Once a certificate has been obtained certifying the reduction in energy for the commercial building then Section 179D can be applied for. The certifying professional will either need to be a general contractor or engineer that is licensed within the jurisdiction of the commercial property.
Section 179D also allots for equipment deduction for the purpose of maintenance on the commercial building. For example, the asset could be tools used to improve the HVAC system within the building and the full price of the tools can be deducted from the gross income.
Having a new commercial roof installed can be a benefit to business owners and the environment and always needs the experience of a local and professional roofer. Contact West Construction Group for help with your commercial roof repair of replacement 972-730-2594.
*West Construction Group does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.