Permanent 179D Tax Deduction Bill Announced

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WASHINGTON, D.C. – Reps. Dave Reichert (R-WA), Earl Blumenauer (D-OR) and Tom Reed (R-NY) introduced bipartisan legislation to make permanent as well as to strengthen and incentivize the use of the energy efficient commercial buildings deduction found in Section 179D of the Internal Revenue Code. The bill (H.R. 3507) ensures that non-profits and tribal governments can benefit from the deduction just like federal, state, and local government building owners do.

“Encouraging energy efficiency is important to our environment and consumers,” said Rep. Reichert. “This bill will further incentivize building owners to install energy efficient systems by making this tax deduction permanent and by making it work for non-profits and tribal governments. Our hospitals, schools, community organizations, and tribal community centers provide critical services to residents in Washington State and people around the country. These entities often operate with limited available funds while doing their best to serve their community. With this tax deduction, they will see a reduction in their energy and construction costs and will be able to focus more on providing important services to the people and families who count on them. Thank you to Reps. Blumenauer and Reed for joining me in support of this legislation.”

“Improving energy efficiency saves money and reduces carbon emissions,” said Rep. Blumenauer. “By strengthening incentives for energy efficiency, we can help nonprofits and tribal governments cut costs, protect the environment, and better serve communities.”

“Making this tax deduction permanent helps enhance energy efficiency in places such as schools and hospitals,” said Rep. Reed. “As a result, there is both an economic and environmental benefit from this change. I am happy to stand with Reps. Reichert and Blumenauer to support this legislation.”


Since becoming law in 2005, 179D has proven to be an effective policy for investment in design and installation of energy efficient systems and structures benefiting consumers across the country. This simple, common-sense bill not only makes this deduction permanent, but it also includes several important improvements to enhance and promote the use of 179D. First, it expands the current law allocation provision to cover tribal governments and non-profits. Under current law, a public building owner may allocate the deduction to the primary designer of the property. Our bill expands this provision to allow non-profit and tribal government building owners to do the same. Second, the bill ensures that S corporations and partnerships receive the full benefit of an allocated deduction. Finally, the bill makes the deduction more compatible with the low-income housing tax credit thereby encouraging the construction of energy efficient affordable housing.

The National Association of Electrical Distributors has worked with the Family Business Coalition to create a permanent 179D replacement. tED magazine and “lightED” will keep you updated on the progress of the bill. If you would like to contact your representative in Congress to voice your support of this bill, you can find that information here.

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