Section 179D Federal Tax Deduction Program

The Energy Policy Act of 2005 (Pub. L. 109-58) authorized the Energy-Efficient Commercial Buildings Tax Deduction for expenses incurred for qualified energy efficient building investments made by a building owner. The deduction may be taken in the year the energy-efficient improvements are placed in service. In government-owned building, the government may allocate this deduction to the person or persons primarily responsible for designing the qualified improvements.

The Division of Administration, Office of Facility Planning and Control, "to provide written allocation of the deduction allowed under Section 179D of the Code, as defined in G.S. 105-228.90, for designing energy efficient commercial building property that is installed on or in the property owned by the State. The allocation must be made in accordance with Section 179D of the Code."

  •  Any designer requesting a written allocation should contact this office to ensure the 179D allocation is available on the building in question.
  • The Office of Facility Planning & Control recognizes there may be multiple parties entitled to the 179D allocation. If a party has contributed to the technical specifications of the HVAC and Hot Water Systems, Building Envelope, and/or Interior Lighting they are entitled to apply for the 179D allocation.
  • Any party interested in securing an allocation will be required to submit in writing a list of all parties responsible for contributing to the technical specifications of the project. In addition, a Shared Deduction or Forfeiture form must be completed and submitted from each party involved. In the event that a party seeking the 179D allocation on a state project reaches out multiple times to other participants and does not receive a response after 2 weeks, written documentation of the repeated attempts will serve as a notice of forfeiture on said project.

 

The information that will need to be submitted is as follows:

  1. Transmittal letter describing project, project number, and proposed percentage allocation form of deduction to each Architect and/or Engineer.
  2. IRS Form for Allocation of Deduction completely filled in with their signature. Separate forms for each primary designer participating in the allocation, with the amount listed, will be needed.
  3. A share deduction and/or forfeiture form from each party involved on the project.

 

Please note that it is the responsibility of any parties seeking the 179D allocation to procure the services of a qualified individual to complete the certification required by IRS Notice 2006-52.

 

For additional information, please see Internal Revenue Service (IRS) guidance on the allocation of the Energy Efficient Commercial Building Tax Deduction for government-owned buildings is set forth in Notice 2008-40, Internal Revenue Bulletin 2008-14, "Amplification of Notice 2006-52; Deduction for Energy Efficient Commercial Buildings." Notice 2008-40 can be found at:

 

http://www.irs.gov/irb/2008-14_IRB/ar12.html

 

 If you have any questions regarding this memorandum, please contact Mark Moses, Interim Director of Office of Facility Planning & Control (225) 342-0820.

 

Forms:

 

State of Louisiana Allocation Letter 

 

Government Owned Building Notice of Shared Allocation with a Designer

 

Government-Owned Building 179D Forfeiture of Allocation to Designer