Commercial Casinos Energy Policy Act Tax Opportunity
Commercial Casinos Energy Policy Act Tax Opportunity
The Casino Environment Before the recent economic downturn commercial casinos raked in more than $30 billion in revenue each year from 2005 through 2008.1 In that time frame, US casino owners built new facilities and expanded in size their current ones. As a result of the economic recession, US casinos constructed commercially is coming to a grinding halt and casino operators are now focused on existing facility cost reduction. The Section 179(D) Tax Provisions Increasingly, casino operators are using the EPAct IRC section 179(D) commercial taxes on energy efficiency of buildings, which have been extended through 2013. EPAct tax deductions are provided for eligible energy reductions on lighting and HVAC(heating and cooling), ventilation) and the building envelope. (Building envelope comprises the foundation of the building, its walls as well as windows, roofs and doors. All of these determine the flow of energy between the outside and the inside of the building.) The Nature of Casino Properties Commercial casinos often encompass hotel resorts, which offer appealing packages of services to their patrons from families and corporate. Casinos are particularly well-suited to EPAct because of their large gaming floors as well as hotel occupancy rooms, meeting rooms, and parking garages. Each of these amenities typically consumes large square footage and the EPAct benefit offers  a Soi cầu potential for up to sixty cents for each square foot of space each of the three factors mentioned above. A few of the smallest commercial casinos are about 500 square feet. The majority of American casinos span over 100,000 sq. feet. One of the biggest, MGM Grand on the Las Vegas strip is almost 2 million square feet. Hotels themselves are the most popular of the Section 179's construction category. (See "Hotels and Motels Most Favored Energy Policy Act Tax Properties") It is common to think of commercial casinos as located in two states Nevada or New Jersey. While it is true these two states are the ones with the largest commercial casino revenues however, there are 12 states with casinos that are commercial within the United States, the other commercial casinos states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. The members of the American Gaming Association have publicized some of their plans to reduce energy use. These casinos are Boyd Gaming Corporation, Harrah's Entertainment, Inc., and MGM Mirage. They have projects which include significant energy savings with cogeneration, ERV(energy recovery ventilation), more efficient HVAC components, replacing incandescent light bulbs with energy efficient lightings, windows that have energy efficient day lighting systems, solar thermal storage and many other initiatives to save energy. The basic rule to qualify for the Section 179D tax incentive makes casinos, and specifically casinos hotels the most popular property category to receive the tax incentive. The rule requires at least a 25% reduction in watts-per square foot in comparison to the standard of 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) standard for building energy codes. Tax deductions are fully deductible using a 40% watts/square foot reduction compared to the ASHRAE 2001 norm. The ASHRAE 2004 hotel/motel building codes require 40% wattage reduction meaning that any hotel or motel light installation that meets the standard is automatically eligible for the maximum EPAct tax credit. Occupancy Rooms For all other types of building the Section 179D tax laws require compliance with the bi-level-switching requirement. The comparison is always made using wired instead of plug-in lighting. The rooms that are used for occupancy at casinos have a major advantage in that they often use plug-in lighting, and because they function as hotels and motels which are specifically exempt from the tax bi-level swapping obligation. Because occupant rooms are typically among the largest rooms in casinos, casinos are typically in a position to utilize energy efficient lighting systems to earn substantial EPAct tax deductions for the facility. B ack of the House Spaces Casinos usually have huge kitchen as well as storage and laundry (so they are also known as"back" of home) spaces that historically used fluorescent lights of the T-12 type. This lighting is so energy inefficient when compared to modern lighting that it will become illegal production in the United States after July 1, 2010.4 Once manufacturing of these earlier generation lighting products stops, the cost of the replacement of these inefficient bulbs will increase. Simply stated, casinos should take action now to replace these fixtures for savings in both energy and lamp replacement costs. The EPAct tax incentive for lighting could be utilized to help address the possibilities associated with the legal requirements for changes to products. Ball Rooms, Banquet Rooms and Restaurants These casinos typically have designer lighting that is energy inefficient and is often expensive in maintenance as well as replacement. Particularly, the replacement of bulbs and lamps in high ceilings is very costly since expensive mobile hydraulic platform equipment needs to be purchased or rented to deal with the replacements. Lighting products that are new, and specifically lighting emitting diode (LED) products use a fraction of the energy used and have a longer lifespan and are now being substituted. The combination of huge reductions in energy costs, operating cost reductions, utility rebates and EPAct tax credits can significantly improve the economic payback from these expensive lighting upgrade. Garages Garages Many casinos have large parking garages, which can conserve significant energy and provide tax deductions of significant amounts by converting to energy efficient fixtures. In Notice 2008-40 dated March 7th of 2008, the IRS declared that parking garages constitute classified as a property type that is specifically entitled to receive EPAct tax deductibility. Furthermore, parking garages have been excluded from the tax bi-level switch obligation. Please see the September, 2008 International Parking Institute article devoted to parking garages' lighting deduction tax opportunities.5 Slot Machines and Gaming Floors One of the biggest players of energy on hotel gaming floors is the slot machine. While these were the first adopters for fluorescent light technology even these efficient bulbs typically need to be changed three times a year because of 24/7 operating hours. Due to the high cost of labor maintenance costs, casino owners are currently switching to LED technology in their slot machines. LED's, despite having higher up front costs, offer high energy efficiency and have a much longer cycle, providing substantial savings on labor and maintenance costs. HVAC Casinos due to their regular 24-hour occupancy can realize significant savings on energy costs from the energy-efficient HVAC systems. In particular, Nevada's warm climate ensures energy-efficient HVAC a very worthwhile investment. Fortunately. Nevada with the highest revenues from casinos has the second-highest capacity for energy efficiency through renewable geothermal energy.6 Certain types of extremely efficient HVAC investments often qualify to receive the HVAC EPAct tax credit, including geothermal and thermal storage.  

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