How it Works
Commercial building owners can take a deduction of up to $.60 per square foot of the building’s floor area
if they install energy efficient lighting that reduces energy and power costs. Generally, these installations
need to be a part of the building’s interior or within the covered sections of a parking garage.
The deduction is allowed for both new construction, and remodeling/re-lamping projects between 2006 through 2013.
Recent legislation allows taxpayers to either amend prior returns or take the deduction in the current tax year.
To achieve the maximum $0.60 deduction, energy and power costs must be reduced by at least 40 percent when compared
to a reference building (special rules apply for warehouses). If the reductions are less than 40 percent but over 25 percent,
the building may still qualify for a deduction on a graduated scale of between $.30 and $.60 per square foot.