Evidence of depreciationAmbika Puniani Bailey
For many businesses, the time period during which a building
component can be depreciated is a major factor in determining when
the component is upgraded or replaced. The current federal tax code
requires a roof system to be depreciated over 39 years, which means
a building owner has little tax incentive to replace a poorly
performing roof system before that time. As a result, building
owners not only are putting off replacing their roof systems
(causing a loss of business to the roofing industry), but roof
systems that may not be as energy-efficient as new systems remain
in place. (For more information about the current law, see
"Depreciation
limit," July issue, page 22.)
NRCA has been lobbying Congress to change the tax code as it
relates to commercial roof systems, arguing that they do not
typically last 39 years. To effectively lobby to change the law,
the roofing industry needed to produce evidence regarding the
expected life spans of commercial roof systems, as well as the
concerns building owners have about replacing them. As a result,
the National Roofing Foundation's Roofing Industry Alliance for
Progress hired the market research firm Ducker Worldwide,
Bloomfield Hills, Mich., to conduct a study that would show how
long commercial roof systems should be expected to last and reveal
building owners' perceptions about purchasing new roof systems
under the current tax code.
It is important to note the study does not provide the
following: variance and position analysis of the various materials
used for low-slope roof systems; material recommendations;
scientific-based testing for life-span determination; warranty
assessment and calculations of life span based on warranty terms;
statistically reliable samples of building owners in each key
application segment; and historical analysis of year-to-year
changes in roof systems. Following is a synopsis of the study.
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