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December 20, 2019

Treasury Questions Section 179D Payments to Governmental Clients

by Katharine Mottley

In response to questions from Senator Ben Cardin (D-MD), a member of the tax-writing Senate Finance Committee, Treasury Assistant Secretary for Tax Policy David Kautter has written a letter clarifying the Section 179D energy-efficient commercial buildings tax deduction process.

Under Section 179D, commercial building owners may be able to claim a tax deduction for installing certain energy-efficient systems. Governmental entities can allocate the tax deduction to the designer of the energy-efficient systems. Some governmental entities have required payment in order to allocate the tax deduction, and ACEC has pushed back against this practice at the federal and state levels.

The Treasury letter expresses concern that designers are being asked to make payments to their governmental clients, and states that this practice is inconsistent with the policy goals of Section 179D.

ACEC strongly supports the Treasury position and is grateful to Senator Cardin for his ongoing efforts on this important issue.

Katharine Mottley is ACEC Senior Director Tax and Regulatory Affairs.


All comments to blog posts will be moderated by ACEC staff.

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