Work on 179D Continues

AIA Virginia and our friends with ACEC Virginia have been working for years to address issues surrounding the Internal Revenue Code Section 179D, Energy-Efficient Commercial Buildings Tax Deduction.

Many of our firms realize significant tax savings in exchange for spending increased design time incorporating energy-efficient solutions into building designs and we’re working to preserve this benefit on multiple fronts.  Beyond our efforts to get 179D extended at the federal level, we’ve been working to curb a practice that firms are encountering in Virginia.

Some public bodies solicit payments or request fee reductions in exchange for signing the required allocation letter. The AIA and other stakeholders have consistently opposed this practice at the federal, state, and local levels. Last legislative session we worked to add language to the Virginia budget which would prevent a public entity from refusing to sign the allocation letter or make the signature contingent on any transfer of value from the designer to the public entity.

Though this effort failed in the end, we haven’t given up. We worked closely with AIA National, ACEC National, and ACEC Virginia to seek Senator Warner’s assistance and support in gaining more clarity surrounding congressional intent relative to section 179D of the IRC. We’re hoping for that guidance issued at the Federal level can be used to strengthen and complement our work at the state level to clarify legislative intent — and put a stop to public bodies asking for a reduced fee or “kickback” from the deduction.

Contact Your Senator Today

Tomorrow, the Senate Finance Committee will begin to debate legislation that would renew several tax provisions which expired at the end of last year. We need you to tell your Senator that the Energy Efficient Commercial Building Tax Deduction is critical to the design and construction industry, and to include it, and some critical updates to it, in this bill.

This tax deduction, known as “179D,” allows building owners to claim a tax deduction up to $1.80 per sq. ft. of building area to install systems that reduce total energy costs. The deduction applies to nearly all commercial, high-rise multifamily residential, health care, institutional, public, and educational facilities. Best of all, it allows government agencies to allocate the deduction directly to the architect and other design professionals, providing an economic boost to design firms. Because of the energy savings and economic activity generated by those claiming the deduction, 179D is a winning proposition for the American taxpayer.

What’s more, the committee is also considering key updates to 179D that would allow nonprofits, tribes, and small businesses to take better advantage of this green building tool.

Unfortunately, the 179D deduction expired at the end of 2014, and without Congressional action, it will not be renewed. Members of Congress need to hear from architects about the importance of the deduction for the design and construction industry, as well as the value of these critical updates to the groups who could take advantage of this incentive the most.

Please contact your Senator and tell them about the importance of extending this tax incentive as a way to not only create jobs, but to help promote energy-efficient design. Without your voice, this opportunity may just pass us by.

AIA Advocacy
govaffs@aia.org