A multipurpose indoor arena that serves as an entertainment venue that hosts concerts, family events, and most importantly, the home of the Pittsburgh Penguins, the PPG Paints Arena is a top attraction not just for tourists, but for the residents of Pittsburgh. However, it’s not as well-known for being the first LEED Gold certified major sports venue in the United States.
The LEED (Leadership in Energy and Environmental Design) certification was created by the U.S. Green Building Council (USGBC) to promote and provide a framework for green, or sustainable, buildings and communities to improve the quality of life. The LEED certification is the most renowned program to be used in more than 167 countries. Besides bringing recognition, green buildings also reduce energy and water consumption, promoting the idea of green buildings and green living. PPG Paints Arena, for instance, consumes 31% less energy and 40% less water than conventional buildings of similar size. LEED buildings generally report 20% lower maintenance costs. It’s not surprising the construction of green buildings has been growing. In fact, according to the Dodge Data & Analytics SmartMarket Report, the global green building sector continues to double every three years.
The benefits of green building go beyond the reduction of maintenance costs. It also provides tax incentives to businesses. The Energy Investment Tax Credit (ITC) allows businesses a tax credit equal to 30% of the cost of installing a major energy system, such as solar panels, as a reduction to federal income taxes. While the ITC is subject to annual limitations, there is no cap on the amount of credit and can be carried forward to a future tax filing year. Additionally, the credit is available to individuals. Please refer to Internal Revenue Code §48 for requirements and eligibility.
Another energy-related tax incentive is the 179D deduction, a deduction that is already utilized by many construction companies. This deduction was extended for the 2017 tax year in the Bipartisan Budget Act of 2018. It remains to be seen if it will be extended for 2018.
Please contact a member of our Construction Tax group for more information on the energy tax incentives and how they can benefit your business.