December 2011

Another shot at depreciation | Capitol Hill

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Another shot at depreciation

NRCA is part of a coalition that continues to seek to lower the depreciation schedule of commercial roof systems

by Brandon Audap
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Earlier this year, NRCA worked with several key Congressional members to introduce legislation that would help create an estimated 40,000 jobs annually in the roofing industry, make significant strides in energy efficiency and provide tax relief for all types of businesses.

The Roofing Efficiency Jobs Act of 2011 (H.R. 2962), introduced by Reps. Tom Reed (R-N.Y.) and Bill Pascrell (D-N.J.), and the Energy-Efficient Cool Roof Jobs Act (S. 1575), introduced by Sens. Ben Cardin (D-Md.) and Mike Crapo (R-Idaho), are bipartisan bills with a laudable goal. Both bills would correct a longstanding flaw in the Internal Revenue Code by reducing the depreciation recovery period for commercial roof system retrofits from 39 to 20 years if newly installed roof systems meet certain benchmark energy-efficiency standards.

An unrealistic measure

Generally, real property was depreciated over 15 years for business tax purposes as recently as the early 1980s. That depreciation schedule increased incrementally until 1993 when nonresidential real property—a commercial building and its structural components—was assigned its current 39-year recovery period as a way for Congress to raise revenue to pay for...

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