TALLAHASSEE, Fla. - Florida is neglecting millions of dollars in federal tax incentives, according to a new Briefing from Florida TaxWatch. Federal legislation allows for tax deductions to offset the cost of energy efficient new buildings or building renovations, which result in added value to the state. TaxWatch recommends the state identify public buildings that could receive the tax deduction.
“Florida is owed money under this federal program deduction, but is failing to pursue the potential savings,” said Dominic M. Calabro, President and CEO of Florida TaxWatch, the independent, nonpartisan, nonprofit taxpayer research institute and government watchdog. “The potential state savings from capitalizing on the tax deduction would provide added value to the state, benefiting the people of Florida.”
A federal tax incentive is available to public and private entities that build new structures or renovate existing buildings to reduce energy consumption by more than 50 percent under Section 179D of the Energy Policy Act of 2005.
Local governments in Florida are taking most advantage of the Section 179D tax deduction, and nearly $4 million in deductions have been utilized statewide. However, only three of Florida’s 67 counties, five of 11 public universities, and three of 410 municipalities have applied and received the deduction. Miami-Dade County and Public Schools lead Florida in incentive collection, totaling more than $2.5 million.
Projects completed before the Dec. 31 expiration date are eligible to receive the deduction through a “look back” provision, and can apply for the deduction up to three years after the renovation completion date.
Many structures in Florida qualify for the deduction because of energy efficiency requirements in new or renovated state buildings under the Florida Administrative Code, but the state is missing its opportunity to collect these incentives.
“Florida should take advantage of the opportunities that are provided through existing of federal incentives,” said Calabro. “By not applying for the deductions, the state is wasting taxpayer dollars that could be spent to serve Floridians.”
Florida TaxWatch estimates nearly $145,000 in savings could result from just a few eligible state buildings.
For more information on the tax incentives available under Section 179D, please see the Florida TaxWatch May 2012 Briefing, “Florida Missing Opportunities to Take Advantage of Federal Programs for Energy-Saving Measures.”