Editor's Note: Pub. L. 117-169, Sec. 13303, amended Sec. 179D
with a delayed effective as indicated below.
I.R.C. § 179D(a) In General —
There shall be allowed as a deduction an amount equal
to the cost of energy efficient commercial building property placed
in service during the taxable year.
Editor's Note: Sec. 179D(b), below, before amendment by Pub.
L. 117-169, Sec. 13303(a)(1), is effective for taxable years beginning
before January 1, 2023.
I.R.C. § 179D(b) Maximum Amount Of Deduction —
The deduction under subsection (a) with respect to any building
for any taxable year shall not exceed the excess (if any) of—
I.R.C. § 179D(b)(1) —
the product of—
I.R.C. § 179D(b)(1)(A) —
$1.80, and
I.R.C. § 179D(b)(1)(B) —
the square footage of the building,
over
I.R.C. § 179D(b)(2) —
the aggregate amount of the deductions
under subsection (a) with
respect to the building for all prior taxable years.
Editor's Note: Sec. 179D(b), below, after amendment by Pub.
L. 117-169, Sec. 13303(a)(1), is effective for taxable years beginning
after December 31, 2022.
I.R.C. § 179D(b) Maximum Amount Of Deduction
I.R.C. § 179D(b)(1) In General —
The deduction under subsection (a) with respect to any
building for any taxable year shall not exceed the excess (if any)
of—
I.R.C. § 179D(b)(1)(A) —
the product of—
I.R.C. § 179D(b)(1)(A)(i) —
the applicable dollar value, and
I.R.C. § 179D(b)(1)(A)(ii) —
the square footage of the building,
over
I.R.C. § 179D(b)(1)(B) —
the aggregate amount of the deductions
under subsections (a) and (f) with respect to the building for the
3 taxable years immediately preceding such taxable year (or, in the
case of any such deduction allowable to a person other than the taxpayer,
for any taxable year ending during the 4-taxable-year period ending
with such taxable year).
I.R.C. § 179D(b)(2) Applicable Dollar Value —
For purposes of paragraph (1)(A)(i), the applicable dollar
value shall be an amount equal to $0.50 increased (but not above $1.00)
by $0.02 for each percentage point by which the total annual energy
and power costs for the building are certified to be reduced by a
percentage greater than 25 percent.
I.R.C. § 179D(b)(3) Increased Deduction Amount For Certain Property
I.R.C. § 179D(b)(3)(A) In General —
In the case of any property which satisfies the requirements
of subparagraph (B), paragraph (2) shall be applied by substituting ‘$2.50’
for ‘$0.50’, ‘$.10’ for ‘$.02’,
and ‘$5.00’ for ‘$1.00’.
I.R.C. § 179D(b)(3)(B) Property Requirements —
In the case of any energy efficient commercial building
property, energy efficient building retrofit property, or property
installed pursuant to a qualified retrofit plan, such property shall
meet the requirements of this subparagraph if —
I.R.C. § 179D(b)(3)(B)(i) —
installation of such property begins
prior to the date that is 60 days after the Secretary publishes guidance
with respect to the requirements of paragraphs (4)(A) and (5), or
I.R.C. § 179D(b)(3)(B)(ii) —
installation of such property satisfies
the requirements of paragraphs (4)(A) and (5).
I.R.C. § 179D(b)(4) Prevailing Wage Requirements
I.R.C. § 179D(b)(4)(A) In General —
The requirements described in this subparagraph with
respect to any property are that the taxpayer shall ensure that any
laborers and mechanics employed by the taxpayer or any contractor
or subcontractor in the installation of any property shall be paid
wages at rates not less than the prevailing rates for construction,
alteration, or repair of a similar character in the locality in which
such property is located as most recently determined by the Secretary
of Labor, in accordance with subchapter IV of chapter 31 of title
40, United States Code.
I.R.C. § 179D(b)(4)(B) Correction And Penalty Related To Failure To Satisfy Wage Requirements —
Rules similar to the rules of section 45(b)(7)(B) shall
apply.
I.R.C. § 179D(b)(5) Apprenticeship Requirements —
Rules similar to the rules of section 45(b)(8) shall
apply.
I.R.C. § 179D(b)(6) Regulations —
The Secretary shall issue such regulations or other guidance
as the Secretary determines necessary to carry out the purposes of
this subsection, including regulations or other guidance which provides
for requirements for recordkeeping or information reporting for purposes
of administering the requirements of this subsection.
I.R.C. § 179D(c) Definitions —
For purposes of this section—
I.R.C. § 179D(c)(1) Energy Efficient Commercial Building Property —
The term “energy efficient commercial building property"
means property—
I.R.C. § 179D(c)(1)(A) —
with respect to which depreciation
(or amortization in lieu of depreciation) is allowable,
I.R.C. § 179D(c)(1)(B) —
which is installed on or in any building
which is--
I.R.C. § 179D(c)(1)(B)(i) —
located in the United States, and
I.R.C. § 179D(c)(1)(B)(ii) —
within the scope of Reference Standard
90.1,
I.R.C. § 179D(c)(1)(C) —
which is installed as part of--
I.R.C. § 179D(c)(1)(C)(i) —
the interior lighting systems,
I.R.C. § 179D(c)(1)(C)(ii) —
the heating, cooling, ventilation,
and hot water systems, or
I.R.C. § 179D(c)(1)(C)(iii) —
the building envelope, and
Editor's Note: Sec. 179D(c)(1)(D), below,
before amendment by Pub. L. 117-169, Sec. 13303(a)(2), (a)(5)(B)(i)(I),
(II), is effective for taxable years beginning before January 1, 2023.
I.R.C. § 179D(c)(1)(D) —
which is certified in accordance
with subsection (d)(6) as
being installed as part of a plan designed to reduce the total annual
energy and power costs with respect to the interior lighting systems,
heating, cooling, ventilation, and hot water systems of the building
by 50 percent or more in comparison to a reference building which
meets the minimum requirements of Reference Standard 90.1 using methods
of calculation under subsection (d)(2).
Editor's Note: Sec. 179D(c)(1)(D), below,
after amendment by Pub. L. 117-169, Sec. 13303(a)(2), (a)(5)(B)(i)(I),
(II), is effective for taxable years beginning after December 31,
2022.
I.R.C. § 179D(c)(1)(D) —
which is certified in accordance
with subsection (d)(5) as
being installed as part of a plan designed to reduce the total annual
energy and power costs with respect to the interior lighting systems,
heating, cooling, ventilation, and hot water systems of the building
by 25 percent or more in comparison to a reference building which
meets the minimum requirements of Reference Standard 90.1 using methods
of calculation under subsection (d)(1).
Editor's Note: Sec. 179D(c)(2), below,
before amendment by Pub. L. 117-169, Sec. 13303(a)(3), (4), is effective
for taxable years beginning before January 1, 2023.
I.R.C. § 179D(c)(2) Reference Standard 90.1 —
The term “Reference Standard 90.1” means,
with respect to any property, the most recent Standard 90.1 published
by the American Society of Heating, Refrigerating, and Air Conditioning
Engineers and the Illuminating Engineering Society of North America
which has been affirmed by the Secretary, after consultation with
the Secretary of Energy, for purposes of this section not later than
the date that is 2 years before the date that construction of such
property begins.
Editor's Note: Sec. 179D(c)(2), below,
after amendment by Pub. L. 117-169, Sec. 13303(a)(3), (4), is effective
for taxable years beginning after December 31, 2022.
I.R.C. § 179D(c)(2) Reference Standard 90.1 —
The term “Reference Standard 90.1” means,
with respect to any property, the more recent of—
I.R.C. § 179D(c)(2)(A) —
Standard 90.1-2007 published by the American
Society of Heating, Refrigerating, and Air Conditioning Engineers
and the Illuminating Engineering Society of North America, or
I.R.C. § 179D(c)(2)(B) —
the most recent Standard 90.1 published
by the American Society of Heating, Refrigerating, and Air Conditioning
Engineers and the Illuminating Engineering Society of North America
for which the Department of Energy has issued a final determination
and which has been affirmed by the Secretary, after consultation with
the Secretary of Energy, for purposes of this section not later than
the date that is 4 years before the date such property is placed in
service.
Editor's Note: Sec. 179D(d), below,
before amendment by Pub. L. 117-169, Sec. 13303(a)(5), (6), (c), is
effective for taxable years beginning before January 1, 2023.
I.R.C. § 179D(d) Special Rules
I.R.C. § 179D(d)(1) Partial Allowance
I.R.C. § 179D(d)(1)(A) In General —
Except as provided in subsection (f), if—
I.R.C. § 179D(d)(1)(A)(i) —
the requirement of subsection (c)(1)(D) is not met, but
I.R.C. § 179D(d)(1)(A)(ii) —
there is a certification in accordance
with paragraph (6) that
any system referred to in subsection (c)(1)(C) satisfies the energy-savings
targets established by the Secretary under subparagraph (B) with respect to such system,
then the
requirement of subsection (c)(1)(D) shall
be treated as met with respect to such system, and the deduction
under subsection (a) shall
be allowed with respect to energy efficient commercial building
property installed as part of such system and as part of a plan to
meet such targets, except that subsection (b) shall be applied to such property
by substituting “$.60” for “$1.80”.
I.R.C. § 179D(d)(1)(B) Regulations —
The Secretary, after consultation with the Secretary
of Energy, shall establish a target for each system described in
subsection (c)(1)(C) such
that, if such targets were met for all such systems, the building
would meet the requirements of subsection (c)(1)(D).
I.R.C. § 179D(d)(2) Methods Of Calculation —
The Secretary, after consultation with the Secretary
of Energy, shall promulgate regulations which describe in detail
methods for calculating and verifying energy and power consumption
and cost, with respect to any property, based on the provisions of
the most recent California Nonresidential Alternative Calculation
Method Approval Manual which has been affirmed by the Secretary, after
consultation with the Secretary of Energy, for purposes of this section
not later than the date that is 2 years before the date that construction
of such property begins.
I.R.C. § 179D(d)(3) Computer Software
I.R.C. § 179D(d)(3)(A) In General —
Any calculation under paragraph (2) shall be prepared by qualified
computer software.
I.R.C. § 179D(d)(3)(B) Qualified Computer Software —
For purposes of this paragraph, the term “qualified
computer software” means software—
I.R.C. § 179D(d)(3)(B)(i) —
for which the software designer has
certified that the software meets all procedures and detailed methods
for calculating energy and power consumption and costs as required
by the Secretary,
I.R.C. § 179D(d)(3)(B)(ii) —
which provides such forms as required
to be filed by the Secretary in connection with energy efficiency
of property and the deduction allowed under this section, and
I.R.C. § 179D(d)(3)(B)(iii) —
which provides a notice form which
documents the energy efficiency features of the building and its
projected annual energy costs.
I.R.C. § 179D(d)(4) Allocation Of Deduction For Public Property —
In the case of energy efficient commercial building
property installed on or in property owned by a Federal, State,
or local government or a political subdivision thereof, the Secretary
shall promulgate a regulation to allow the allocation of the deduction
to the person primarily responsible for designing the property in
lieu of the owner of such property. Such person shall be treated
as the taxpayer for purposes of this section.
I.R.C. § 179D(d)(5) Notice To Owner —
Each certification required under this section shall
include an explanation to the building owner regarding the energy
efficiency features of the building and its projected annual energy
costs as provided in the notice under paragraph (3)(B)(iii).
I.R.C. § 179D(d)(6) Certification
I.R.C. § 179D(d)(6)(A) In General —
The Secretary shall prescribe the manner and method
for the making of certifications under this section.
I.R.C. § 179D(d)(6)(B) Procedures —
The Secretary shall include as part of the certification
process procedures for inspection and testing by qualified individuals
described in subparagraph (C) to
ensure compliance of buildings with energy-savings plans and targets.
Such procedures shall be comparable, given the difference between
commercial and residential buildings, to the requirements in the
Mortgage Industry National Accreditation Procedures for Home Energy
Rating Systems.
I.R.C. § 179D(d)(6)(C) Qualified Individuals —
Individuals qualified to determine compliance shall
be only those individuals who are recognized by an organization certified
by the Secretary for such purposes.
Editor's Note: Sec. 179D(d), below,
after amendment by Pub. L. 117-169, Sec. 13303(a)(5), (6), (c), is
effective for taxable years beginning after December 31, 2022.
I.R.C. § 179D(d) Special Rules
I.R.C. § 179D(d)(1) Methods Of Calculation —
The Secretary, after consultation with the Secretary
of Energy, shall promulgate regulations which describe in detail
methods for calculating and verifying energy and power consumption
and cost, with respect to any property, based on the provisions of
the most recent California Nonresidential Alternative Calculation
Method Approval Manual which has been affirmed by the Secretary, after
consultation with the Secretary of Energy, for purposes of this section
not later than the date that is 4 years before the date that such
property is placed in service.
I.R.C. § 179D(d)(2) Computer Software
I.R.C. § 179D(d)(2)(A) In General —
Any calculation under paragraph (1) shall be prepared by qualified
computer software.
I.R.C. § 179D(d)(2)(B) Qualified Computer Software —
For purposes of this paragraph, the term “qualified
computer software” means software—
I.R.C. § 179D(d)(2)(B)(i) —
for which the software designer has
certified that the software meets all procedures and detailed methods
for calculating energy and power consumption and costs as required
by the Secretary,
I.R.C. § 179D(d)(2)(B)(ii) —
which provides such forms as required
to be filed by the Secretary in connection with energy efficiency
of property and the deduction allowed under this section, and
I.R.C. § 179D(d)(2)(B)(iii) —
which provides a notice form which
documents the energy efficiency features of the building and its
projected annual energy costs.
I.R.C. § 179D(d)(3) Allocation Of Deduction By Certain Tax-Exempt Entities
I.R.C. § 179D(d)(3)(A) In General —
In the case of energy efficient commercial building
property installed on or in property owned by a specified tax-exempt
entity, the Secretary shall promulgate regulations or guidance to
allow the allocation of the deduction to the person primarily responsible
for designing the property in lieu of the owner of such property.
Such person shall be treated as the taxpayer for purposes of this
section.
I.R.C. § 179D(d)(3)(B) Specified Tax-Exempt Entity —
For purposes of this paragraph, the term ‘specified
tax-exempt entity’ means—
I.R.C. § 179D(d)(3)(B)(i) —
the United States, any State or political
subdivision thereof, any possession of the United States, or any agency
or instrumentality of any of the foregoing,
I.R.C. § 179D(d)(3)(B)(ii) —
an Indian tribal government (as defined
in section 30D(g)(9))
or Alaska Native Corporation (as defined in section 3 of the Alaska
Native Claims Settlement Act (43 U.S.C. 1602(m)), and
I.R.C. § 179D(d)(3)(B)(iii) —
any organization exempt from tax imposed
by this chapter.
I.R.C. § 179D(d)(4) Notice To Owner —
Each certification required under this section shall
include an explanation to the building owner regarding the energy
efficiency features of the building and its projected annual energy
costs as provided in the notice under paragraph (2)(B)(iii).
I.R.C. § 179D(d)(5) Certification
I.R.C. § 179D(d)(5)(A) In General —
The Secretary shall prescribe the manner and method
for the making of certifications under this section.
I.R.C. § 179D(d)(5)(B) Procedures —
The Secretary shall include as part of the certification
process procedures for inspection and testing by qualified individuals
described in subparagraph (C) to
ensure compliance of buildings with energy-savings plans and targets.
Such procedures shall be comparable, given the difference between
commercial and residential buildings, to the requirements in the
Mortgage Industry National Accreditation Procedures for Home Energy
Rating Systems.
I.R.C. § 179D(d)(5)(C) Qualified Individuals —
Individuals qualified to determine compliance shall
be only those individuals who are recognized by an organization certified
by the Secretary for such purposes.
I.R.C. § 179D(e) Basis Reduction —
For purposes of this subtitle, if a deduction is allowed
under this section with respect to any energy efficient commercial
building property, the basis of such property shall be reduced by
the amount of the deduction so allowed.
Editor's Note: Sec. 179D(f), below,
before being struck by Pub. L. 117-169, Sec. 13303(a)(5)(B)(iv), is
effective for taxable years beginning before January 1, 2023.
I.R.C. § 179D(f) Interim Rules For Lighting Systems —
Until such time as the Secretary issues final regulations
under subsection (d)(1)(B) with
respect to property which is part of a lighting system--
I.R.C. § 179D(f)(1) In General —
The lighting system target under subsection (d)(1)(A)(ii) shall be a
reduction in lighting power density of 25 percent (50 percent in
the case of a warehouse) of the minimum requirements in Table 9.5.1
or Table 9.6.1 (not including additional interior lighting power
allowances) of Standard 90.1-2007.
I.R.C. § 179D(f)(2) Reduction In Deduction If Reduction Less Than 40 Percent
I.R.C. § 179D(f)(2)(A) In General —
If, with respect to the lighting system of any building
other than a warehouse, the reduction in lighting power density
of the lighting system is not at least 40 percent, only the applicable
percentage of the amount of deduction otherwise allowable under
this section with respect to such property shall be allowed.
I.R.C. § 179D(f)(2)(B) Applicable Percentage —
For purposes of subparagraph (A), the applicable percentage
is the number of percentage points (not greater than 100) equal to
the sum of—
I.R.C. § 179D(f)(2)(B)(i) —
50, and
I.R.C. § 179D(f)(2)(B)(ii) —
the amount which bears the same ratio
to 50 as the excess of the reduction of lighting power density of
the lighting system over 25 percentage points bears to 15.
I.R.C. § 179D(f)(2)(C) Exceptions —
This subsection shall not apply to any system—
I.R.C. § 179D(f)(2)(C)(i) —
the controls and circuiting of which
do not comply fully with the mandatory and prescriptive requirements
of Standard 90.1-2007 and which do not include provision for bilevel
switching in all occupancies except hotel and motel guest rooms,
store rooms, restrooms, and public lobbies, or
I.R.C. § 179D(f)(2)(C)(ii) —
which does not meet the minimum
requirements for calculated lighting levels as set forth in the
Illuminating Engineering Society of North America Lighting Handbook,
Performance and Application, Ninth Edition, 2000.
Editor's Note: Sec. 179D(f), below,
as added by Pub. L. 117-169, Sec. 13303(a)(7), is effective property
placed in service after December 31, 2022 (in taxable years ending
after such date) if such property is placed in service pursuant to
qualified retrofit plan (within the meaning of such section) established
after such date.
I.R.C. § 179D(f) Alternative Deduction For Energy Efficient Building Retrofit
Property
I.R.C. § 179D(f)(1) In General —
In the case of a taxpayer which elects (at such time
and in such manner as the Secretary may provide) the application of
this subsection with respect to any qualified building, there shall
be allowed as a deduction for the taxable year which includes the
date of the qualifying final certification with respect to the qualified
retrofit plan of such building, an amount equal to the lesser of—
I.R.C. § 179D(f)(1)(A) —
the excess described in subsection (b)
(determined by substituting ‘energy use intensity’ for ‘total
annual energy and power costs’ in paragraph (2) thereof), or
I.R.C. § 179D(f)(1)(B) —
the aggregate adjusted basis (determined
after taking into account all adjustments with respect to such taxable
year other than the reduction under subsection (e)) of energy efficient
building retrofit property placed in service by the taxpayer pursuant
to such qualified retrofit plan.
I.R.C. § 179D(f)(2) Qualified Retrofit Plan —
For purposes of this subsection, the term ‘qualified
retrofit plan’ means a written plan prepared by a qualified
professional which specifies modifications to a building which, in
the aggregate, are expected to reduce such building's energy
use intensity by 25 percent or more in comparison to the baseline
energy use intensity of such building. Such plan shall provide for
a qualified professional to—
I.R.C. § 179D(f)(2)(A) —
as of any date during the 1-year period
ending on the date on which the property installed pursuant to such
plan is placed in service, certify the energy use intensity of such
building as of such date,
I.R.C. § 179D(f)(2)(B) —
certify the status of property installed
pursuant to such plan as meeting the requirements of subparagraphs
(B) and (C) of paragraph (3), and
I.R.C. § 179D(f)(2)(C) —
as of any date that is more than 1 year
after the date on which the property installed pursuant to such plan
is placed in service, certify the energy use intensity of such building
as of such date.
I.R.C. § 179D(f)(3) Energy Efficient Building Retrofit Property —
For purposes of this subsection, the term ‘energy
efficient building retrofit property’ means property—
I.R.C. § 179D(f)(3)(A) —
with respect to which depreciation (or
amortization in lieu of depreciation) is allowable,
I.R.C. § 179D(f)(3)(B) —
which is installed on or in any qualified
building,
I.R.C. § 179D(f)(3)(C) —
which is installed as part of—
I.R.C. § 179D(f)(3)(C)(i) —
the interior lighting systems,
I.R.C. § 179D(f)(3)(C)(ii) —
the heating, cooling, ventilation,
and hot water systems, or
I.R.C. § 179D(f)(3)(C)(iii) —
the building envelope, and
I.R.C. § 179D(f)(3)(D) —
which is certified in accordance with
paragraph (2)(B) as meeting the requirements of subparagraphs (B)
and (C).
I.R.C. § 179D(f)(4) Qualified Building —
For purposes of this subsection, the term ‘qualified
building’ means any building which—
I.R.C. § 179D(f)(4)(A) —
is located in the United States, and
I.R.C. § 179D(f)(4)(B) —
was originally placed in service not
less than 5 years before the establishment of the qualified retrofit
plan with respect to such building.
I.R.C. § 179D(f)(5) Qualifying Final Certification —
For purposes of this subsection, the term ‘qualifying
final certification’ means, with respect to any qualified retrofit
plan, the certification described in paragraph (2)(C) if the energy
use intensity certified in such certification is not more than 75
percent of the baseline energy use intensity of the building.
I.R.C. § 179D(f)(6) Baseline Energy Use Intensity
I.R.C. § 179D(f)(6)(A) In General —
For purposes of this subsection, the term ‘baseline
energy use intensity’ means the energy use intensity certified
under paragraph (2)(A), as adjusted to take into account weather.
I.R.C. § 179D(f)(6)(B) Determination Of Adjustment —
For purposes of subparagraph (A), the adjustments described
in such subparagraph shall be determined in such manner as the Secretary
may provide.
I.R.C. § 179D(f)(7) Other Definitions —
For purposes of this subsection—
I.R.C. § 179D(f)(7)(A) Energy Use Intensity —
The term ‘energy use intensity’ means the
annualized, measured site energy use intensity determined in accordance
with such regulations or other guidance as the Secretary may provide
and measured in British thermal units.
I.R.C. § 179D(f)(7)(B) Qualified Professional —
The term ‘qualified professional’ means
an individual who is a licensed architect or a licensed engineer and
meets such other requirements as the Secretary may provide.
I.R.C. § 179D(f)(8) Coordination With Deduction Otherwise Allowed Under Subsection
(a)
I.R.C. § 179D(f)(8)(A) In General —
In the case of any building with respect to which an
election is made under paragraph (1), the term ‘energy efficient
commercial building property’ shall not include any energy efficient
building retrofit property with respect to which a deduction is allowable
under this subsection.
I.R.C. § 179D(f)(8)(B) Certain Rules Not Applicable
I.R.C. § 179D(f)(8)(B)(i) In General —
Except as provided in clause (ii), subsection (d) shall
not apply for purposes of this subsection
I.R.C. § 179D(f)(8)(B)(ii) Allocation Of Deduction By Certain Tax-exempt Entities —
Rules similar to subsection (d)(3) shall apply for purposes
of this subsection.
Editor's Note: Sec. 179D(g), below,
before amendment by Pub. L. 117-169, Sec. 13303(a)(8), is effective
for taxable years beginning before January 1, 2023.
I.R.C. § 179D(g) Inflation Adjustment —
In the case of a taxable year beginning after 2020, each
dollar amount in subsection (b) or subsection (d)(1)(A) shall be increased
by an amount equal to—
I.R.C. § 179D(g)(1) —
such dollar amount, multiplied by
I.R.C. § 179D(g)(2) —
the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting “calendar year 2019”
for “calendar year 2016” in subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence which is not
a multiple of 1 cent shall be rounded to the nearest cent.
Editor's Note: Sec. 179D(g), below,
after amendment by Pub. L. 117-169, Sec. 13303(a)(8), is effective
for taxable years beginning after December 31, 2022.
I.R.C. § 179D(g) Inflation Adjustment —
In the case of a taxable year beginning after 2022, each
dollar amount in subsection (b) shall be increased by an amount equal
to—
I.R.C. § 179D(g)(1) —
such dollar amount, multiplied by
I.R.C. § 179D(g)(2) —
the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting “calendar year 2021”
for “calendar year 2016” in subparagraph (A)(ii) thereof.
Any increase determined under the
preceding sentence which is not a multiple of 1 cent shall be rounded
to the nearest cent.
Editor's Note: Sec. 179D(h), below,
before amendment by Pub. L. 117-169, Sec. 13303(a)(5)(B)(v), is effective
for taxable years beginning before January 1, 2023.
I.R.C. § 179D(h) Regulations —
The Secretary shall promulgate such regulations as
necessary—
I.R.C. § 179D(h)(1) —
to take into account new technologies
regarding energy efficiency and renewable energy for purposes of
determining energy efficiency and savings under this section, and
I.R.C. § 179D(h)(2) —
to provide for a recapture of the
deduction allowed under this section if the plan described in subsection (c)(1)(D) or (d)(1)(A) is not fully implemented.
Editor's Note: Sec. 179D(h), below,
after amendment by Pub. L. 117-169, Sec. 13303(a)(5)(B)(v), is effective
for taxable years beginning after December 31, 2022.
I.R.C. § 179D(h) Regulations —
The Secretary shall promulgate such regulations as
necessary—
I.R.C. § 179D(h)(1) —
to take into account new technologies
regarding energy efficiency and renewable energy for purposes of
determining energy efficiency and savings under this section, and
I.R.C. § 179D(h)(2) —
to provide for a recapture of the
deduction allowed under this section if the plan described in subsection (c)(1)(D) is not fully implemented.
(Added by Pub. L. 109-58,
title XIII, Sec. 1331(a), Aug. 8, 2005, 119
Stat. 594; and amended by Pub.
L. 109-432, div. A, title II, Sec. 204, Dec. 20,
2006, 120 Stat. 2922; Pub. L. 110-343, div. B, title III,
Sec. 303, Oct. 3, 2008, 122 Stat. 3765; Pub. L. 113-295, Div. A, title I,
Sec. 158(a), Dec. 19, 2014, 128 Stat.
4010; Pub. L. 114-113,
Div. Q, title I, Sec. 190(a), title III, Sec. 341, Dec. 18, 2015; Pub. L. 115-123, Div. D, title I, Sec.
40413(a), Feb. 9, 2018, 132 Stat. 64; Pub. L. 115-141, Div. U, title IV, Sec.
401(a)(54), Mar. 23, 2018, 132 Stat. 348; Pub. L. 116-94, Div. Q, title I, Sec. 131(a),
Dec. 20, 2019; Pub. L. 116-260,
Div. EE, title I, Sec. 102, Dec. 27, 2020, 134 Stat. 1182; Pub. L.
117-169, title I, Sec. 13303, August 16, 2022, 136 Stat. 1818.)
BACKGROUND NOTES
AMENDMENTS
2022 -
Subsec. (b). Pub. L. 117-169, Sec. 13303(a)(1), amended sec. (b).
Before amendment, it read as follows:
“The deduction under subsection (a) with
respect to any building for any taxable year shall not exceed the
excess (if any) of—
“(1) the product of—
“(A) $1.80, and
“(B) the square footage of the building,
over
“(2) the aggregate amount of the deductions
under subsection (a) with respect to the building for all prior taxable
years.”
Subsec. (c)(1)(D). Pub. L. 117-169, Sec. 13303(a)(2),
amended subpar. (D) by substituting “25 percent” for “50
percent”.
Subsec. (c)(2). Pub. L. 117-169, Sec. 13303(a)(3),
amended subclause. (II) by substituting “the most recent”
for “the more recent of—
“(A) Standard 90.1-2007 published by the
American Society of Heating, Refrigerating, and Air Conditioning Engineers
and the Illuminating Engineering Society of North America, or
“(B) the most recent”.
Subsec. (c)(2)(B). Pub. L. 117-169, 13303(a)(4)(A),
amended subpar. (B) by substituting “for which the Department
of Energy has issued a final determination and” for “which
has been affirmed”
Subsec. (c)(2)(B). Pub. L. 117-169, 13303(a)(4)(B),
amended subpar. (B) by substituting “4 years” for “2
years”.
Subsec. (c)(2)(B). Pub. L. 117-169, 13303(a)(4)(C),
amended subpar. (B) by substituting “such property is placed
in service” for “that construction of such property begins”.
Subsec. (d)(1). Pub. L. 117-169, 13303(a)(5)(A)(i),
amended par. (1) by striking (1). Before being struck it read as follows:
“(A) In General
“Except as provided in subsection (f), if—
“(i) the requirement of subsection (c)(1)(D)
is not met, but
“(ii) there is a certification in accordance
with paragraph that any system referred to in subsection (c)(1)(C)
satisfies the energy-savings targets established by the Secretary
under subparagraph (B) with respect to such system,
“then the requirement of subsection (c)(1)(D)
shall be treated as met with respect to such system, and the deduction
under subsection (a) shall be allowed with respect to energy efficient
commercial building property installed as part of such system and
as part of a plan to meet such targets, except that subsection (b)
shall be applied to such property by substituting “$.60” for “$1.80”.
“(B) Regulations
“The Secretary, after consultation with the
Secretary of Energy, shall establish a target for each system described
in subsection (c)(1)(C) such that, if such targets were met for all
such systems, the building would meet the requirements of subsection
(c)(1)(D).”
Subsec. (d)(1). Pub. L. 117-169, 13303(a)(5)(A)(ii),
redesignated pars. (2) through (6) as paragraphs (1) through (5),
respectively.
Subsec. (c)(1)(D). Pub. L. 117-169, 13303(a)(5)(B)(i)(I),
by substituting “subsection (d)(5)” for “subsection
(d)(6)”.
Subsec. (c)(1)(D). Pub. L. 117-169, 13303(a)(5)(B)(i)(II),
by substituting “subsection (d)(1)” for “subsection
(d)(2)”.
Subsec. (d)(2)(A). Pub. L. 117-169, 13303(a)(5)(B)(ii),
by substituting “paragraph (1)” for “paragraph (2)”.
Subsec. (d)(4). Pub. L. 117-169, 13303(a)(5)(B)(iii),
by substituting “paragraph (2)(B)(iii)’” for “paragraph
(3)(B)(iii)’”.
Subsec. (f). Pub. L. 117-169, 13303(a)(5)(B)(iv),
amended sec. (f) by striking the entire section. Prior to amendment
it read as follows:
“(f) Interim Rules For Lighting Systems
“Until such time as the Secretary issues
final regulations under subsection (d)(1)(B) with respect to property
which is part of a lighting system--
“(1) In General
“The lighting system target under subsection
(d)(1)(A)(ii) shall be a reduction in lighting power density of 25
percent (50 percent in the case of a warehouse) of the minimum requirements
in Table 9.5.1 or Table 9.6.1 (not including additional interior lighting
power allowances) of Standard 90.1-2007.
“(2) Reduction In Deduction If Reduction
Less Than 40 Percent
“(A) In General
“If, with respect to the lighting system
of any building other than a warehouse, the reduction in lighting
power density of the lighting system is not at least 40 percent, only
the applicable percentage of the amount of deduction otherwise allowable
under this section with respect to such property shall be allowed.
“(B) Applicable Percentage
“For purposes of subparagraph (A), the applicable
percentage is the number of percentage points (not greater than 100)
equal to the sum of—
“(i) 50, and
“(ii) the amount which bears the same ratio
to 50 as the excess of the reduction of lighting power density of
the lighting system over 25 percentage points bears to 15.
“(C) Exceptions This subsection shall not
apply to any system—
“(i) the controls and circuiting of which
do not comply fully with the mandatory and prescriptive requirements
of Standard 90.1-2007 and which do not include provision for bilevel
switching in all occupancies except hotel and motel guest rooms, store
rooms, restrooms, and public lobbies, or
“(ii) which does not meet the minimum requirements
for calculated lighting levels as set forth in the Illuminating Engineering
Society of North America Lighting Handbook, Performance and Application,
Ninth Edition, 2000.”.
Subsec. (h). Pub. L. 117-169, 13303(a)(5)(B)(v),
amended clause (v) by striking “or (d)(1)(A)”. Prior to
amendment it read as follows:
“to provide for a recapture of the deduction
allowed under this section if the plan described in subsection (c)(1)(D)
or (d)(1)(A) is not fully implemented.”
Subsec. (d)(3) . Pub. L. 117-169, 13303(a)(6),
amended par. (3) by redesignating paragraph. Prior to amendment it
read as follows:
“(3)Allocation Of Deduction For Public Property
In the case of energy efficient commercial building
property installed on or in property owned by a Federal, State,
or local government or a political subdivision thereof, the Secretary
shall promulgate a regulation to allow the allocation of the deduction
to the person primarily responsible for designing the property in
lieu of the owner of such property. Such person shall be treated
as the taxpayer for purposes of this section.”
Subsec. (f) . Pub. L. 117-169, 13303(a)(7), added
new section. (f).
Subsec. (g). Pub. L. 117-169, 13303(a)(8)(A), amended
sec. (g) by substituting “2022” for “2020”.
Subsec. (g). Pub. L. 117-169, 13303(a)(8)(B), amended
sec. (g) by striking “or subsection (d)(1)(A)”. Before
amendment, it read as follows:
“In the case of a taxable year beginning
after 2020, each dollar amount in subsection (b) or subsection (d)(1)(A)
shall be increased by an amount equal to—”
Subsec. (g). Pub. L. 117-169, 13303(a)(8)(C), amended
sec. (g) by substituting “2021” for “2019”.
2020 - Subsec. (b)(1)(B)(ii). Pub. L. 116-260, Div. EE, Sec. 102(c)(1)(A),
amended clause (ii) by substituting “Reference Standard 90.1”
for “Standard 90.1–2007”.
Subsec. (c)(1)(D). Pub. L. 116-260, Div. EE, Sec. 102(c)(1)(A),
amended subpar. (D) by substituting “Reference Standard 90.1”
for “Standard 90.1–2007”.
Subsec. (c)(2). Pub. L. 116-260, Div. EE, Sec. 102(c)(1)(B),
amended par. (2). Prior to amendment it read as follows:
“(2) Standard 90.1–2007.—The
term “Standard 90.1–2007” means Standard 90.1–2007
of the American Society of Heating, Refrigerating, and Air Conditioning
Engineers and the Illuminating Engineering Society of North America
(as in effect on the day before the date of the adoption of Standard
90.1–2010 of such Societies).”
Subsec. (d)(2). Pub. L. 116-260, Div. EE, Sec. 102(c)(2),
amended par. (2) by substituting “with respect to any property,
based on the provisions of the most recent California Nonresidential
Alternative Calculation Method Approval Manual which has been affirmed
by the Secretary, after consultation with the Secretary of Energy,
for purposes of this section not later than the date that is 2 years
before the date that construction of such property begins” for “based
on the provisions of the 2005 California Nonresidential Alternative
Calculation Method Approval Manual”.
Subsec. (h). Pub. L.
116-260, Div. EE, Sec. 102(a), struck subsec. (h). Before
being struck it read as follows:
“(h) Termination.—This section shall
not apply with respect to property placed in service after December
31, 2020.”
Subsec. (g). Pub. L.
116-260, Div. EE, Sec. 102(b), redesignated subsec. (g)
as subsec. (h) and added a new subsec. (g).
2019 — Subsec. (h). Pub. L. 116-94, Div. Q, Sec. 131(a), amended
subsec. (h) by substituting “December 31, 2020” for “December
31, 2017”.
2018--Subsec. (d)(1)(B). Pub.
L. 115-141, Div. U, Sec. 401(a)(54), amended subpar. (B)
by substituting “such that” for “which”.
Subsec.
(h). Pub. L. 115-123, Sec. 40413(a),
amended subsec. (h) by substituting “December 31, 2017”
for “December 31, 2016”.
2015--Subsec. (c)(1). Pub. L. 114-113, Div. Q, Sec. 341(a), amended
par. (1) by substituting “Standard 90.1–2007” for “Standard
90.1–2001” each place it appeared.
Subsec. (c)(2). Pub.
L. 114-113, Div. Q, Sec. 341(b)(1), amended par. (2). Before
amendment, it read as follows:
“(2) Standard 90.1-2001.—The term
“Standard 90.1-2001” means Standard 90.1-2001 of the American Society
of Heating, Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America (as in effect
on April 2, 2003).”
Subsec. (f)(1). Pub.
L. 114-113, Div. Q, Sec. 341(b)(2), amended par. (1) by
substituting “Standard 90.1–2007” for “Standard
90.1–2001” each place it appears.
Subsec. (f)(1). Pub.
L. 114-113, Div. Q, Sec. 341(b)(3), amended par. (1) by
substituting “Table 9.5.1” for “Table 9.3.1.1”
and by substituting “Table 9.6.1” for “Table 9.3.1.2”.
Subsec. (f)(2)(C)(i). Pub.
L. 114-113, Div. Q, Sec. 341(b)(2), amended clause (i) by
substituting “Standard 90.1–2007” for “Standard
90.1–2001” each place it appears.
Subsec. (h). Pub. L.
114-113, Div. Q, Sec. 190(a), amended subsec. (h) by substituting “December
31, 2016” for “December 31, 2014”.
2014--Subsec. (h). Pub.
L. 113-295, Div. A, Sec. 158(a), amended subsec.
(h) by substituting “2014” for “2013”.
2008--Subsec. (h). Pub. L. 110-343, Div. B, Sec. 303,
amended subsec. (h) by substituting “2013” for “2008.
2006--Subsec. (h). Pub. L. 109-432, Sec. 204, amended
subsec. (h) by substituting “2008” for “2007”.
EFFECTIVE DATE OF 2022
AMENDMENTS
Amendments by Pub. L. 117-169, Sec. 13303, generally
effective for taxable years beginning after December 31, 2022.
Sec. 13303(d)(2) provided: “ALTERNATIVE
DEDUCTION FOR ENERGY EFFICIENT BUILDING RETROFIT PROPERTY.—Subsection
(f) of section 179D of the Internal Revenue Code of 1986 (as amended
by this section), and any other provision of such section solely for
purposes of applying such subsection, shall apply to property placed
in service after December 31, 2022 (in taxable years ending after
such date) if such property is placed in service pursuant to qualified
retrofit plan (within the meaning of such section) established after
such date.”
EFFECTIVE DATE OF 2020 AMENDMENTS
Amendments by Pub. L.
116-260, Div. EE, Sec. 102, effective for property placed
in service after December 31, 2020.
EFFECTIVE DATE OF 2019 AMENDMENT
Amendment by Pub. L. 116-94,
Div. Q, Sec. 131(a), effective for property placed in service after
December 31, 2017.
EFFECTIVE
DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(54),
effective March 23, 2018.
Amendment
by Pub. L. 115-123, Sec. 40413(a),
effective for property placed in service after December 31, 2016.
EFFECTIVE
DATE OF 2015 AMENDMENTS
Amendment
by Pub. L. 114-113, Div. Q, Sec.
190(a), effective for property placed in service after December 31,
2014.
Amendment
by Pub. L. 114-113, Div. Q, Sec.
341, effective for property placed in service after December 31, 2015.
EFFECTIVE
DATE OF 2014 AMENDMENTS
Amendment
by Div. A, Sec. 158(a) of Pub. L.
113-295 effective for property placed in service
after December 31, 2013.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendment by Div. B, Sec. 303 of Pub. L. 110-343 effective on the
date of the enactment of this Act [Enacted: Oct. 3, 2008].
EFFECTIVE
DATE OF 2006 AMENDMENTS
Amendment
by Sec. 204 of Pub. L. 109-432 effective
on the date of the enactment of this Act [Enacted: Dec. 20, 2006].
EFFECTIVE DATE
Effective for property placed in service after
December 31, 2005.