New tax incentives have recently been put in place & expanded that allow commercial buildings to retrofit or upgrade fire sprinkler systems. These changes were put in place to: 1) encourage increased adoption of fire sprinkler systems in commercial buildings to protect life & property, and 2) stimulate the economy. If you own or manage a commercial building, it means you may be able to completely expense the cost of making your building safer and less vulnerable to fire.
Contact Elite Fire today for a fire sprinkler retrofit, expansion, or improvement quote! You’ll want to talk with your tax advisor once you have the quote to discover how these fire sprinkler tax write-offs will impact your bottom line.
Which Buildings & Businesses Qualify for Fire Sprinkler Tax Incentives?
Current fire sprinkler tax incentives for commercial buildings are rooted in 2 recent changes:
Fire Sprinkler Write-offs for Small Businesses
The first law change took limited fire sprinkler expensing to $1.04 million for commercial structures. This was included in 2017 as Section 179 of landmark tax reform legislation. Small businesses who qualified could expense the cost of installation, as well as interest incurred by loans taken to finance the fire sprinkler system install. Strictly limited to commercial structures, Section 179 did cover retrofitting existing buildings with new fire sprinkler systems, but also upgrading existing systems.
Many small & medium sized buildings that are not currently protected by fire sprinklers we covered by this change – but other larger (or more complex to protect) buildings were left out.
Temporary Expansion of Tax Incentives for Larger Commercial Buildings
A 2020 correction to the previous law truly expands the number of commercial buildings that can now take advantage of tax incentives for fire sprinkler systems – although time is limited. The Coronavirus Economic Stabilization Act (CESA) of 2020 updated the law to apply to businesses of any size – for fire sprinklers install/improvements from September 27,2017 to December 31, 2022. After 2022, the deduction percent allowed gets lower until using a permanent schedule in 2027.
Now commercial buildings of any size may be able to completely expense the cost of adopting fire sprinkler systems for fire protection.
(see this NFSA Fact Sheet for additional details)
Importance of Fire Sprinklers for Commercial Buildings
At Elite Fire we completely support incentivizing commercial buildings to adopt fire sprinkler systems. In a study covering 2010-2014, 96% of fire sprinkler systems in buildings were successful at controlling the fire. Unfortunately, only 50% of manufacturing facilities, and 25% of stores, offices, or warehouses that experienced fires in that time even had fire sprinklers systems installed.
Fire sprinklers protect far more than just a building. In the case of a fire, the lives of tenants, employees, clients, and even emergency responses are threatened. Building damage not only requires repairs, but also shuts down the building or restricts its ability to function normally. The aftereffects of a structure fire can continue to radiate and even impact the community’s economy as a whole.
Commercial Fire Sprinkler Design/Install in Dallas, TX
Elite Fire specializes in design/build fire protection projects of any size & complexity. We’ve been a leading fire sprinkler contractor in the Dallas area (and Texas as a whole) for over 30 years.
If you’re interested in being able to fully expense the cost of installing or upgrading a fire sprinkler system in your commercial building:
- Contact Elite Fire right away to get a quote from our expert fire sprinkler designers & engineers.
- Take that quote to a professional tax advisor who can help you navigate the tax incentive specifics (we’re sprinkler experts – not tax law experts!)
Contact Elite Fire with any other questions about your building’s fire protection!