Commercial Casinos Energy Policy Act Tax Opportunity

Commercial Casinos Energy Policy Act Tax Opportunity

The Casino Environment

Before the current economic downturn, commercial casinos amassed at the least $30 billion in sales every 12 months from 2005 thru 2008.1 During this period, US on line casino owners constructed new centers and expanded the scale in their existing centers. As a end result of the economic downturn, new US industrial casino production has come to a screeching halt and casino operators are actually centered on existing facility price discount.

The Section 179(D) Tax Provisions

Increasingly, on line casino operators are taking gain of the EPAct IRC segment 179(D) commercial constructing power performance tax provisions, that have been prolonged via 2013. EPAct tax deductions are available for qualifying power reductions in lighting fixtures, HVAC(heating, air flow, and air con), and building envelope. (Building envelope includes the constructing’s basis, walls, roof, windows, and doors, all of which manipulate the waft of strength between the indoors and outdoors of the constructing.)

The Nature of Casino Properties

Commercial casinos regularly encompass inn resorts, which give appealing programs of services for their corporate and own family customers. Casinos are specially applicable to EPAct because of their big gaming floors, resort occupancy rooms, assembly halls, and parking garages. Each of these features generally consumes massive rectangular pictures and the EPAct benefit has a capacity for up to 60 cents in step with rectangular foot for every of the three measures described above. Some of the smallest business casinos are about 50,000 square ft at the same time as most American casinos are usually over one hundred,000 square feet. One of the most important ones, MGM Grand on the Las Vegas strip is almost 2 million rectangular feet. Hotels themselves are the most desired of Section 179 building class. (See “Hotels and Motels Most Favored Energy Policy Act Tax Properties”)

It is not unusual to consider business casinos as located in two states Nevada and New Jersey. While it’s miles actual that these states have the biggest industrial casino sales, there are 12 states with industrial casinos within the United States, the other business casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Members of the American Gaming Association have publicized some of their commitments to electricity reduction. Reporting casinos encompass Boyd Gaming Corporation, Harrah’s Entertainment, Inc., and MGM Mirage. They have projects which consist of extensive energy savings through cogeneration, ERV(electricity healing air flow), more efficient HVAC units, replacing incandescent lighting with strength green lightings, windows with power efficient day lighting systems, sun thermal storage and severa other strength saving projects.

The underlying rule set to qualify for the Section 179D lighting tax deduction makes casinos and mainly casino resorts the maximum favored assets category for the tax incentive. The rule set requires as a minimum a 25% watts-in step with-square foot reduction in comparison to the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) building strength code fashionable. Full tax deduction is performed with a forty% watts-in step with-rectangular foot reduction in comparison to the ASHRAE 2001 wellknown. The ASHRAE 2004 motel/lodge building code fashionable calls for forty% wattage reduction, which means that that any hotel or resort lights set up that meets that constructing code requirement will automatically qualify for the most EPAct tax deduction.

Occupancy Rooms

For most other building categories, the Section 179D tax provisions require compliance with the bi-stage switching requirement. The contrast is usually primarily based on wired in preference to plug-in lights. Casino hotel occupancy rooms have a prime benefit in that they frequently use plug-in lights, and due to the fact these rooms feature as lodge and hotel areas, they are specifically excluded from the tax bi-degree switching requirement. Since occupant rooms are typically one in every of the bigger areas in resort casinos, casinos are normally capable of use electricity green lighting fixtures to generate big EPAct tax deductions for the ability.

Back of the House Spaces

Casinos often have large kitchen, garage, and laundry (so known as again of the residence) areas that have historically used T-12 fluorescent lighting. This lighting fixtures is so electricity inefficient in comparison to ultra-modern lighting fixtures merchandise that it is going to be illegal to fabricate within the United States after July 1, 2010.4 Once production of those earlier technology lighting products ceases, the cost of replacing these inefficient bulbs will growth. Simply stated, casinos must take into account performing now to update these lighting to keep both strength and lamp alternative fees. The EPAct lighting fixtures tax incentive can be used to cope with the possibilities related to those legally mandated product changes

Ball Rooms, Banquet Rooms and Restaurants

These areas of casinos have historically used designer type lights that is power inefficient and often very pricey to maintain and update. In specific, replacing bulbs and lamps in high ceilings is very highly-priced considering luxurious mobile hydraulic platform gadget must be rented or purchased to deal with the replacements. New lighting fixtures products and, specifically, mild emitting diode (LED) products, use a fraction of the electricity and have a much longer useful life and at the moment are being substituted. The aggregate of massive electricity value discount, operating price reductions, software rebates and EPAct tax deductions can greatly improve the monetary payback from these extra steeply-priced lighting fixtures upgrades.

Parking Garages

Many casinos have big adjacent parking garages that can save extensive energy costs and generate huge tax deductions via upgrading to strength green fixtures. In Notice 2008-40 issued March 7th, 2008, the IRS announced that parking garages are a assets class this is particularly entitled to apply the EPAct tax deductions. Also, parking garages are excluded from the tax bi-degree switching requirement. Please see the September, 2008 International Parking Institute article committed to parking garages EPAct lighting deduction tax opportunities.5

Slot Machines and Gaming Floors

One of the most important electricity customers on lodge gaming flooring is slot machines. Although those had been early adapters of fluorescent generation, even those electricity efficient bulbs normally need to be modified 3 instances a yr due to 24/7 working hours. Due to the high hard work renovation prices, on line casino owners are now transitioning to LED technology in their slot machines. LED’s, while they have got better up front costs, have high electricity efficiency and lots longer existence cycle, providing sizable financial savings in hard work and upkeep prices.


Casinos because of their normal 24 hour occupancy can attain vast power value savings from energy efficient HVAC structures. In specific, Nevada’s hot weather similarly makes strength green HVAC a totally profitable funding. Fortunately. Nevada with the best revenues from has America’s second highest capability for electricity performance thru renewable geothermal energy.6 Certain categories of very efficient HVAC investments will often qualify for the HVAC EPAct tax incentive which include geothermal and thermal garage.

LEED Casinos

We assume to see extra casinos acquire LEED reputation. (See LEED Building Tax Opportunities Article7). In 2008, The Palazzo, Las Vegas Casino became the largest LEED licensed building and one of the first licensed LEED casinos in the US.8 Casinos and inns discover that sure categories of common vacationers are very inquisitive about staying in centers which have truly established they’re focused on the environment and sustainable design. To turn out to be LEED certified, a casino must have a constructing power simulation model created with the aid of a certified engineer. Modeling is likewise required for the EPAct, HVAC and Building Envelope tax deductions. Qualified tax experts that realize the way to make the changes to convert LEED laptop models to EPAct tax deduction models can examine LEED fashions and determine whether large tax deductions are in all likelihood. For instance, a 500,000 rectangular foot LEED casino that qualifies for the most EPAct tax deduction will get hold of an instantaneous tax deduction of $900,000 =(500,000*$1.Eighty). Casino owners who understand the value of those benefits can use the tax financial savings to assist justify the expenses related to achieving LEED reputation.

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