If the building is privately owned, the owner of the building asset who is typically the building owner, gets the tax deduction. The owner is considered the party that owns the equipment—such as a new lighting system—for tax purposes. In some cases, this may be a building tenant.
If the building is publicly owned—Federal, State or local government or a political subdivision of one—then the person primarily responsible for the design claims the deduction.
For some government owned buildings, a private entity such as an energy services company, may own the asset. In this case, the asset would be considered under the privately owned approach.
As of January 1, 2007, the IRS has not ruled on how the deduction for government buildings is to be taken. |
‘‘(4) ALLOCATION OF DEDUCTION FOR PUBLIC PROPERTY.—In the case of energy efficient commercial building property installed on or in property owned by a Federal, State, or local government or a political subdivision thereof, the Secretary shall promulgate a regulation to allow the allocation of the deduction to the person primarily responsible for designing the property in lieu of the owner of such property. Such person shall be treated as the taxpayer for purposes of this section.”
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