From January 1, 2006 to December 31, 2008, the Commercial Buildings Deduction offers an accelerated tax deduction that is the lesser of:
- The complete cost of installing “energy-efficient commercial property”
- $1.80/sq.ft.
“Energy-efficient commercial building property” is defined as:
- Interior lighting systems, HVAC/hot water systems and building envelope features, which are …
- Otherwise depreciable as a cost, and …
- Installed in the United States or its territories, and …
- Part of new construction or renovation within the scope of the ASHRAE/IES Standard 90.1-2001, and …
- Certified to reduce total annual energy and power costs to at least 50% less than a building satisfying ASHRAE/IES Standard 90.1-2001.
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‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.—The deduction undersubsection (a) with respect to any building for any taxable yearshall not exceed the excess (if any) of—
‘‘(1) the product of—
‘‘(A) $1.80, and
‘‘(B) the square footage of the building, over
‘‘(2) the aggregate amount of the deductions under subsection(a) with respect to the building for all prior taxable years.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) ENERGY EFFICIENT COMMERCIAL BUILDING PROPERTY.—
The term ‘energy efficient commercial building property’ means property—
‘‘(A) with respect to which depreciation (or amortization in lieu of depreciation) is allowable,
‘‘(B) which is installed on or in any building which
is—
‘‘(i) located in the United States, and
‘‘(ii) within the scope of Standard 90.1–2001,
‘‘(C) which is installed as part of—
‘‘(i) the interior lighting systems,
‘‘(ii) the heating, cooling, ventilation, and hot water systems, or
‘‘(iii) the building envelope, and
‘‘(D) which is certified in accordance with subsection (d)(6) as being installed as part of a plan designed to reduce the total annual energy and power costs with respect to the interior lighting systems, heating, cooling, ventilation, and hot water systems of the building by 50 percent or more in comparison to a reference building which meets the minimum requirements of Standard 90.1–2001 using methods of calculation under subsection (d)(2).”
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