NEMA Issues Guidelines for EPAct 2005 Commercial Building Tax Deduction

By Consulting Specifying Engineer Staff October 17, 2006

The National Electrical Manufacturers Assn. (NEMA) issued its Guidance on Energy Policy Act Commercial Building’s Tax Deduction Certification Letters on Oct. 4 to answer the many questions received from project contractors and designers on how to satisfy the project certification requirements of the EPAct 2005. The NEMA document provides sample language and examples for how the certification letter may be done. To download it, go to .

The Energy Policy Act of 2005, Section 1331, provides for a tax deduction of up to $1.80 per sq. ft. for new or retrofit energy efficient commercial buildings that reduce energy use by 50% when compared to a national standard (ASHRAE/IESNA 90.1-2001, as of April 2003).

Internal Revenue Service Notice 2006-52, as revised June 26, 2006, provides for a technical certification by a professional engineer or contractor licensed in the building’s jurisdiction. This certification outcome may be used by a tax professional in calculations for the tax deduction. The certification also provides assurance to the building owner that the building meets its required energy savings goals.

NEMA and its members have led a comprehensive program of advocacy and stakeholder education to facilitate implementation of the tax provision. In America’s “service economy,” commercial buildings are a major target for energy-efficiency improvements.