Commercial Building Tax Deduction Coalition


The Energy Policy Act of 2005 included a new tax incentive, backed and advocated by the National Electrical Manufacturers Association (NEMA) and the Natural Resources Defense Council (NRDC), to improve the energy efficiency of commercial buildings.

The "Commercial Building Tax Deduction" establishes a tax deduction for expenses incurred for energy efficient building expenditures made by a building owner.  The deduction is limited to $1.80 per square foot of the property, with allowances for partial deductions for improvements in interior lighting, HVAC and hot water systems, and building envelope systems.

The Emergency Economic Stabilization Act of 2008 (HR-1424), approved and signed on October 3, 2008, extends the benefits of the Energy Policy Act of 2005 through December 31, 2013.

About the CBTD Coalition

NEMA convened a broad-based coalition of business, trade, government, energy efficiency, and other groups and organizations.  The Commercial Building Tax Deduction Coalition is working to ensure the provision is implemented smoothly and to promote awareness and information about its benefits, and energy efficiency improvements in commercial buildings.

About the Provision

On August 8, 2005, history was made when President George W. Bush signed H.R. 6, the Energy Policy Act of 2005.  The legislation set a precedent by containing a market transformation incentive in the form of a tax deduction for owner investments in commercial building energy efficiency.

The Energy Policy Act of 2005 establishes a new deduction for expenses incurred for energy-efficient commercial building property.  The deduction is equal to energy-efficient commercial building property expenditures made by the taxpayer, subject to a cap.  This document describes the tax deduction provision in general.  Nothing in this material should be construed as a substitute for consultation with a qualified tax professional.
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