The Consolidated Appropriations Act of 2021 signed late last month known widely for its COVID-19 stimulus relief also includes some perhaps lesser-known tax provisions that make permanent several tax extensions. Notably for the clean technology industry, Section 179D has been made permanent, encouraging energy efficient design for commercial buildings.
The commercial buildings energy efficiency tax deduction, originally created as part of the Energy Policy Act of 2005, provides building owners with tax incentives to initiate qualified energy projects. The $1.80 per square foot deduction was originally a temporary provision that was extended every few years, which often presented budgeting challenges for building owners designing new projects.
With the bill signed in December, 179D is now a permanent extension, with the deduction amount growing each year relative to inflation. This enables ESCOs, contractors and building owners to more efficiently develop projects and budgets.
