The American Fire Sprinkler Association (AFSA) applauds the United States Congress for passing and President Donald Trump for signing the Tax Cuts and Jobs Act (H.R. 1) recently, a comprehensive reform of the U.S. tax code. AFSA members are poised to benefit from several aspects of this monumental legislation, including particular language that directly affects the fire sprinkler industry – incentivizing business owners to retrofit their properties with fire sprinkler systems.
“Since 2003, AFSA has been a leading voice in the advocacy efforts to have this specific type of federal legislation that promotes fire sprinklers enacted into law,” says Frank Mortl III, CAE, AFSA President. “AFSA’s merit shop contractor volunteer representatives along with national staff are so proud of this provision in the tax reform bill that will undoubtedly save the lives of countless American workers and families.”
H.R. 1 provides this important incentive and allows the cost of sprinkler retrofits to be deducted as a Section 179 expense. This tax-policy change will allow numerous occupancies including businesses, restaurants, retail spaces and other establishments to protect their employees and customers.
Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179), allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated.
The final bill expands the definition of qualified real property eligible for Section 179 by expensing improvements to nonresidential real property after such property was first placed in service. In addition, new Section 179 language allows the following types of building improvements to be eligible for the immediate write-off:
- Heating, ventilation, and air-conditioning property,
- Fire protection and alarm systems, and
- Security systems.
Fire sprinklers save lives, but cost considerations have prevented some property owners from making this important investment for too long. This new tax code signed into law December 22 will make it easier and more cost-effective to install these life-saving systems than ever before.