National Fire Sprinkler Association Highlights The Tax Incentives Available For Installing A New Sprinkler System

8 Jan 2021

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The US federal government passed a new legislation called the ‘Tax Cuts & Job Act’. This legislation includes incentives for businesses that install new fire sprinkler systems. As fire sprinklers are the quickest way to extinguish a fire, it’s important to incentivize businesses to install one. Money should never be seen as a deterrent to keeping your employees and patrons safe.

‘Tax Cuts & Job Act’

US Congress has added fire protection as an eligible expenditure under Section 179 of the tax code

US Congress has added fire protection as an eligible expenditure under Section 179 of the tax code. The Congress has also increased the cap to US$ 1 million (up from US$ 500,000) as the amount that a small business can deduct in a single year.

This provision applies only to commercial structures and cannot be used for retrofitting sprinklers into residential structures. However, critical occupancies such as entertainment venues could easily be done under this provision. This change is also a permanent law and unlike section 13201 is not gradually phased out over time.

Best time to install new sprinkler system

With tax incentives now in place, combined with one of the best economic growth in recent times, there has never been a better time to install a new sprinkler system. When speaking with a tax professional about these tax breaks, make sure to reference the changes in Section 179 of the recently passed tax reform legislation (P.L. 115-97), for up to US$ 1 million in fire protection.

What’s included in Section 179? This includes:

Roofs
Heating, Ventilation and Air Conditioning
Fire protection and Alarm Systems
Security Systems

What types of Building Types are listed in Section 179? They include:

Local, Small Businesses
Nightclubs
Restaurants/Diners (local owner)
Bowling Alleys
Locally Owned Movie Theatres
Main Street America-type Shops
High-Rise Commercial Buildings
Residential Occupancies
Condos

Inclusion of fire sprinklers in tax reform

The National Fire Sprinkler Association (NFSA) spent many years working with the government to ensure this tax reform was completed. Vickie Pritchett, the Director of Outreach and Government Relations at the NFSA stated, “The successful inclusion of fire sprinklers in tax reform is a result of years of steadfast work to educate. Our fire service allies and others were difference makers.”

She adds, “The advocate voices made a difference as we worked to bring the stories to life, so legislators would understand and support fire safety inclusion in the incentive package.”

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Vickie Pritchett National Fire Sprinkler Association (NFSA)

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