Tax Benefits of Sustainable Features

     EPAct:  In 2005, the US Congress passed the Energy Policy Act of 2005 ("EPAct").  The act incentivised energy efficient construction and "retrofitting" of existing buildings.  The most coomonly utilized provision under EPAct is the Energy Efficient Commercial Buildings Deduction.

     Full Deduction:  The Energy Efficient Commercial Buildings Deduction allows a property owner to claim an immediate tax deduction of up to $1.80 per square foot for energy efficient improvements to a building's envelope or its lighting, water and heating, ventilation and air conditionaing systems.  A building qualifies for the full deduction when energy efficient improvements are installed as part of a plan to reduce the building's total annual energy and power costs by 50% when measured against a reference building located in the same climate zone that meets the minimum requirements of American Society of Heating, Refrigeration and Air Conditioning Engineers or ASHRAE Standard 90.1-2001. 

Partial Deduction: A partial deduction is available for energy efficient improvements in each of the building's systems that result in energy cost savings of 16.6%.  The partial deduction equals up to $.60 per square foot for each qualifiying system.

     Hogan Building: The plan to incorporate the sustainable features of energy efficient windows and lighting controls may qualify the Hogan Building for the above tax deduction.  If these features qualify, the Hogan Building would definitely be eligible for the partial deduction and possibly the full deduction.