As a business owner you are always looking for ways to become more profitable. Green Tax Credits can help you do just that. Not only will you get a credit you will realize cost saving over the lifetime of the green improvement.
A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90.1-2001.
Partial qualifying tax deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems but does fails to achieve the 50-percent reduction in energy and power cost required. These tax deductions are available for systems “placed in service” from January 1, 2006 through December 31, 2013.
Before taking the credit the building owner must certify installation and must calculate the 50-percent savings. To calculate the savings The Performance Rating Method (PRM) must be used to compute the percentage reduction in the total annual energy and power costs for the combined usage of a building’s heating, cooling, ventilation, hot water, and interior lighting systems as compared to a Reference Building that meets the minimum requirements.
Reductions in any other energy uses, such as receptacles, process loads, refrigeration, cooking, and elevators, are not taken into account in determining whether the 50-percent reduction is achieved.
A public list of software programs that must be used in calculating energy and power consumption is available. An approved software vendor must be used to calculate the savings. Therefore consideration should be given to selecting a contractor that can measure the savings or a company that specializes in conducting the review for the rating.
GreeningDetroit.com lists companies that can provide this service. In all cases due diligence in selecting contractors and vendors will save you time and money. Tina Humphrey is a Registered Tax Professional with 32 of experience and Sustainability Consultant.
Source information from Energy Star and Internal Revenue Service.
Author: Tina Riley-Humphrey, representing GreeningDetroit.com