News Archive: Ask the Professional East Bay Business Times

For Immediate Release:
January 12, 2007

Timothy Tikalsky, Tax Stockholder
ttikalsky@rina.com
925-210-2180
1220 Oakland Blvd., Suite 300
Walnut Creek, CA 94596
www.rina.com

Q. Can I get a deduction for making my commercial building more energy efficient?

A. Yes. The commercial building deduction, which was enacted in the Energy Policy Act of 2005, allows owners and leaseholders to deduct the cost of energy-efficient property installed in commercial buildings. The amount deductible may be as much as $1.80 per square foot of building floor area for buildings that achieve a 50-percent energy savings target. The Act provides that buildings below the 50-percent threshold may, nevertheless, qualify for a deduction of up to 60 cents per square foot of building floor area if they meet a 16 2/3rd percent energy savings target. Before claiming the deduction, the taxpayer must obtain a certification that the required energy savings will be achieved. In addition, the Department of Energy will create and maintain a public list of software that must be used to calculate energy savings for purposes of providing the certification.