Tax Extension Benefits HVAC

WASHINGTON - The HVAC industry has the opportunity to benefit from federal tax incentives extended earlier this year. Homebuilders and commercial building owners can lower both the energy costs of their buildings and their federal tax liability through 2008 by incorporating energy efficiency in their properties. Tax breaks are also available for energy-saving improvements to existing commercial buildings through 2008.

“We urge all eligible businesses and manufacturers to improve their bottom lines, help extend the nation’s energy supplies, and lessen their contributions to air pollution and climate change by taking full advantage of the federal energy-efficiency tax incentives,” said Kateri Callahan, president of the Alliance to Save Energy.

Through tax year 2008, owners or tenants can receive a federal tax deduction of up to $1.80 a square foot for cutting by at least half the annual heating, cooling, ventilation, water heating, and interior lighting costs of new or renovated buildings that meet the national American Society of Heating, Refrigerating and Air-Conditioning Engineers’ (ASHRAE’s) Standard 90.1-2001.

Lesser deductions, of $0.60 per square foot, are available for less sweeping energy-efficiency measures - specifically for improvements to only one of three building systems - the building envelope, the lighting system, or heating and cooling system. To claim that deduction, the owner or tenant must reduce total heating, cooling, ventilation, water heating or interior lighting energy use by 16.66 percent (that percentage being one-third of the higher 50 percent goal). If the owner or tenant makes energy-efficiency improvements of 16.66 percent to two of the three systems, an $0.80 per square foot tax deduction is available.

For more information, visit

Publication date: 07/23/2007

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