As the year draws to a close, commercial HVAC
contractors in Philadelphia have been
getting a lot of questions from customers who didn’t manage to squeeze-in an
HVAC upgrade in 2018. What tax credits and other incentives will be available
to your business in 2019? The seasoned pros at H&H break it down for you…
Federal Tax Deductions on Upgrades (& New Installations)
If your aging commercial heating and air system is still running on R22 refrigerant, you’re playing with fire. After January 2020, R22 systems can no longer be repaired, they must be replaced, potentially leading to a backlog of customers waiting on installations. Luckily there is a great tax incentive for your business: The recently passed Tax Cuts and Jobs Act included a provision to allow HVAC products to be immediately expensed. Effective January 2018, under Section 26 U.S. Code § 179 Small Business Expensing, all components of a “heating, ventilation, and air-conditioning” system can be immediately expensed in the first year instead of being depreciated over 39 years. Instead of a measly $350 depreciation for the year (based on old rules), deducting the $14,000 system and installation costs from your 2019 business income could earn you a tax break of $5,000+.
Federal Tax Credits for Geothermal
If you're concerned your business is a commercial energy hog, now’s a great time to dig into geothermal. Undergoing numerous amendments including one this February, the Federal Business Energy Investment Tax Credit (ITC) provides a tax credit equal to 10% of expenditures with no maximum for geothermal property, including components used to produce geothermal energy to those used in the electrical transmission stage, valid through December 2021. (Credit on geothermal heat pumps has no stated expiration.)
Federal Tax Credits for Combined Heat & Power (CHP)
As the above, the Federal Business Energy Investment Tax Credit (ITC) provides a tax credit equal to 10% of expenditures with no maximum for CHP systems up to 50MW capacity exceeding 60% efficiency, subject to some limitations. This does not apply to CHP systems utilizing biomass for 90%+ of system energy, though the credit may be reduced for less efficient systems.
State-Level Rebates
Concerned about new efficiency requirements for rooftop units? Due to environmental and energy concerns, most states offer financial incentives for businesses interested in boosting efficiency, such as New Jersey’s COOL Advantage and WARM Advantage Programs, which provide rebates for high-efficiency HVAC systems.
State-Level Corporate Tax Breaks
Many states also exempt purchases of energy efficient products from sales or use taxes, or offer special sales tax free holidays for Energy Star-rated products.
Utilities Rebates
Local utility providers also commonly provide rebates and other incentives for energy efficient upgrades and appliance purchases.
What’s Available in Your Area?
Learn more from the U.S. Department
of Energy’s DSIRE website
and Energy Star.
Interested in learning more about available system upgrade options for your business and incentives available in your area? Schedule a complimentary consultation from a qualified HVAC contractor from H&H Commercial Services today.
Interested in learning more about available system upgrade options for your business and incentives available in your area? Schedule a complimentary consultation from a qualified HVAC contractor from H&H Commercial Services today.
This post originally appeared on: https://hhcommercialonline.com/will-happen-commercial-hvac-upgrade-incentives-2019-year/