SMACNA, as part of the 179D Coalition, a group of over 40 organizations and companies, recently urged the Senate to extend and strengthen the Section 179D deduction for energy efficient commercial buildings as part of tax reform. SMACNA and the Coalition feel that by leaving this important tax policy expired as of December 31, 2016, the Tax Cuts and Jobs Act risks eliminating an incentive that has become a crucial tool to promote economic and employment growth in communities across the country.
Since the its inception, Section 179D has leveraged billions of dollars in private capital, resulted in energy efficient enhancements to thousands of buildings, and created and preserved hundreds of thousands of jobs. The Coalition feels reforms to Section 179D can boost its contributions to our economy even more.
These benefits are confirmed by a recent economic impact study conducted by Regional Economic Models, Inc. (“REMI”). REMI’s conclusion is unequivocal, finding that “Section 179D is an engine of economic and employment growth.” In particular, an enhanced tax incentive for energy efficient commercial buildings, including reforms geared toward retrofits of privately-owned buildings, could support up to 76,529 jobs and contribute almost $7.4 billion toward our national GDP each year. These results represent a significant return on the taxpayer investment in Section 179D, well in excess of the provision’s revenue cost. The study also confirms that long-term extension/permanence of the current version of Section 179D or making more modest changes to the incentive would have a substantial positive impact on economic and employment growth. Such approaches have been adopted by the Senate Finance Committee in the past on a bipartisan basis, as well as reflected in H.R. 3507, bipartisan legislation in the House in the 115th Congress.
The Coalition further explained that while the expanded expensing provisions of the Tax Cuts and Jobs Act are helpful, they are not a substitute for the incentive provided by Section 179D. Consequently, given its role in supporting jobs and economic growth in communities across the country, we strongly urge you to make the extension and enhancement of Section 179D a priority for comprehensive tax reform.
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