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Posted on: August 7, 2018

Tax Incentives Offered to Replace Fire Sprinkler Systems

Fire Sprinkler Incentives Offered

Fire sprinklers save lives and property. Now is the time to invest in your fire sprinkler system or retrofit your building with lifesaving and property conserving protection. In December, Congress passed the most sweeping tax reform legislation since 1986. Included in this legislation are two fire sprinkler incentives:

Cost Recover Section 13201 – Previously sprinkler systems in commercial structures were depreciated over a 39-year time horizon and residential structures over 27.5 years. Under the new law any sprinkler system installed after September 27, 2017 in either a commercial or residential structure until December 31, 2022 will be able to be fully expensed. Therefore, the property owner will be able to immediately write off the full cost of the sprinkler system. After 2022 the ability to deduct the costs.

Small Business Section 179 Expensing – Previously qualified small businesses were allowed to fully expense purchases such as computers, equipment and light duty vehicles up to an annual cap of $500,000. Under the new law Congress has added fire protection as an eligible expenditure under section 179 of the tax code. Congress also increased the cap to $1 million
as the amount that a small business can deduct in a single year. This provision applies only to commercial structures and cannot be used for retrofitting sprinklers into residential structures. However, critical occupancies such as entertainment venues could easily be done under this provision. This change is also a permanent law and unlike section 13201 is not gradually phased out over time.

For more information about this new tax law, please contact Vickie Pritchett, Director or Outreach & Government Relations at the National Fire Sprinkler Association, at 443.569.9506 or via email at pritchett@nfsa.org.

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