What is EPAct 2005?
The Energy Policy Act of 2005, formally known as EPAct 2005, provides building owners a tax deduction based on the installation of equipment that generates the efficient use of energy. The Energy Efficient Commercial Building Deduction provides owners the ability to deduct up to $.60/sq. ft. off their federal taxes in the year the lighting systems are placed in service, as long as the lighting exceeds the energy code requirements called out in ASHRAE/IES Standard 90.1-2001.
Additional tax benefits can be achieved from energy efficient upgrades to the HVAC/hot water system along with the building itself, capped at $1.80/square foot. The Commercial Building Deduction is part of Section 1331 of EPAct 2005, which went into effect in January 1, 2006, and currently will continue through December 31, 2013.
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