Recent law changes have created tax incentives for retrofitting or upgrading fire sprinkler systems in commercial buildings. The new law may allow you to fully expense the cost to update, expand, or install a completely new fire sprinkler system in your building. The purpose of these tax incentives is twofold: protect life and property & stimulate the economy.
Contact Frontier Fire today to request a fire sprinkler quote, and talk to a professional tax advisor to see exactly how the new tax incentives will impact your financials.
Does Your Business Qualify for Fire Sprinkler Tax Incentives?
There are two recent law changes that create the current tax incentives for commercial fire sprinklers:
Section 179
Small Business Fire Sprinkler Write-Offs
Section 179 was included in tax reform legislation in late 2017. It permits small businesses to expense the cost of installing a fire sprinkler system up to $1.04 million. Businesses that use loans to install the system can even write off the interest on the loan. In addition to the maximum cost limitation, this provision applies only to commercial structures - but does include existing fire sprinkler upgrades & retrofitting existing structures.
This tax incentive is appropriate for many small to medium size businesses - depending on the size & complexity of the fire sprinkler system, and your region.
CESA 2020 - Cost Recovery Section 13201
Expand Incentives to Larger Buildings Temporarily
This year (2020), the Coronavirus Economic Stabilization Act (CESA) included a correction to previous law to further incentivize fire sprinkler retrofits for businesses of any size. This incentive still only applies to commercial property, but greatly increases the number of businesses who can take advantage of these tax incentives. The new Cost Recovery Section 13201 only applies to sprinkler systems in existing commercial buildings installed or upgraded from September 27, 2017 to December 31, 2022. Businesses will need to act before then to take advantage of the temporary 100% expensing. After 2022 the deductions decrease gradually to a permanently set schedule in 2027.
Many more, larger buildings like high-rises are encouraged with this change to install/improve fire sprinkler systems.
(check out this Fact Sheet created by the NFSA for more info)
Retrofit Commercial Buildings with Fire Sprinklers
Commercial structure fires are obviously serious, but the impact goes far beyond just the scene of the accident and the business affected.
Commercial fires impact:
- Employees
- Customers
- Business & building owners
- Emergency responders
- Neighboring businesses & community
- Local economy
- & beyond
Only 25% of stores, offices, and warehouses - and 50% of manufacturing facilities - that experienced structure fires from 2010-2014 were protected by fire sprinkler systems. However, a full 96% of those sprinkler systems were effective at controlling the fire. Clearly, fire sprinklers can reduce the many risks of a building fire - and there are still many buildings & businesses that could benefit.
If you’re in the 75% of buildings not currently protected by proper fire sprinkler systems, now is the perfect time to take additional steps to protect not just your building, but the businesses & people who use it.
Commercial Fire Sprinkler Retrofits in Denver, CO
Are you curious about the cost of retrofitting or upgrading your building’s fire protection system to see how these tax incentives affect you? Contact Frontier Fire today to request a quote on a fire sprinkler system design/install, or any of our other fire protection services. You take your fire sprinkler quote to meet with a tax professional who can help you understand the specifics of these new tax incentives for fire sprinklers.
Frontier Fire has been the leading fire protection company in the Denver area for decades, and we now have locations throughout the Rockies & Western US. We’re not just a fire sprinkler contractor, we are your full fire/life services provider from fire alarms to backflow - design, build, inspect, repair - with 24/7 emergency service available.
