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The Year in Taxes

By: Mark E. Battersby
Posted: February 25, 2009, from the March 2009 issue of Skin Inc. magazine.

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That means leased retail spas and skin care businesses can share in the tax savings estimated to reach $8.7 billion in 10 years. However, the shorter, 15-year write-off period for more permanent types of improvements to retail locations is good only for the 2009 tax year. On the other hand, the write-offs apply to owner-occupied businesses, as well as leased establishments.

Taxes on energy savings

Last fall’s tax law changes extended a number of energy tax incentives, many of which apply to spas, and quite a few of those extensions go beyond the one- or two-year periods authorized by lawmakers for non-energy extenders.

Among the provisions extended were several energy efficiency and energy property tax incentives. For example, an eight-year extension of investment credits for solar energy was extended, as were breaks for wind, geothermal and other alternative energy sources. In addition to tax credits for utilizing alternative energy in spas, there is also a unique tax deduction available to anyone making a commercial building more energy efficient.

Tax deductions for energy-efficient buildings have been extended through Dec. 31, 2013, and are expected to generate tax savings in excess of $890 million over a ten-year period. Rather than a deduction for the cost of equipment or improvements to make a commercial building more energy efficient, the amount deductible is up to $1.80 per square foot of building floor area for buildings achieving a 50% energy savings target. A lesser, flat-rate deduction is available for achieving smaller energy savings.

Under the tax rules, to qualify, energy savings must be accomplished through energy and power cost reductions for the building’s heating, cooling, ventilation, hot water and interior lighting systems. This opens the door to a number of possibilities, particularly for spas. However, as is the case with all of the Emergency Economic Stabilization Act’s provisions, professional guidance is strongly recommended.

The New Markets Tax Credit