Week 2!
March 22, 2023
Hey guys!! This week was a bit less eventful than last week, and I didn’t make any major breakthroughs with my independent research. However, I’ve worked steadily at my internship, and I’ve probably learned enough about taxes to last a lifetime.
The specific law that I’m working on analyzing – the 179D Energy Efficient Deduction Law – basically incentivizes businesses to employ energy efficient means of building design within the HVAC, lighting, and building envelope components. Fully qualifying components must have an energy reduction amount of 50%, with additional deductions available for partially qualifying properties (see below). The law provided a tax deduction of up to $1.80/square foot (with additional adjustments for inflation) to qualifying buildings. The changes that this law has undergone (due to the passage of the Inflation Reduction Act) have expanded these incentives (up to $5.00/sf for qualifying properties), which means there is more competition among companies to get this tax deduction, which is why my company needs to analyze the law and develop a new business strategy. (This graphic does a pretty good job of explaining multiple aspects of this law).
| Compliance Path | Savings Requirement* | Tax Deduction** | |||
| Taxable Years Before 2021 | Taxable Year Beginning 2021 | Taxable Year Beginning 2022 | |||
| Fully Qualifying Property | 50% | $1.80/Ft² | $1.82/Ft² | $1.88/Ft² | |
| Partially Qualifying Property | Envelope | 10% | $0.60/Ft² | $0.61/Ft² | $0.63/Ft² |
| HVAC And HW | 15% | ||||
| Lighting | 25% | ||||
| Interim Lighting Rule | 25%–40% Lower Lighting Power Density (50% For Warehouses) | $0.60/Ft²*** | $0.61/Ft²*** | $0.63/Ft²***
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(https://www.energy.gov/eere/buildings/179d-commercial-buildings-energy-efficiency-tax-deduction)
In terms of my independent research, I’ve located two interesting books that I’ve begun to read: “Getting To Yes” by William Ury, Roger Fisher, and Bruce Patton; and “Peacemaking in International Conflict” by William Zartman. Other than that, I’ve continued to read and outline my already-collected sources as thoroughly and efficiently as I can, but I think I’m starting to get enough data/substance for my main argument to start taking shape.
Thank you so much for reading!!
~ Maria