Recently I had a great conversation with Chris Henderson, operations director, and Matt Rader, green building cost segregation director, of SourceCorp Professional Services, the leading provider of specialized tax services in North America. Undoubtedly, the idea of dealerships becoming environmentally sustainable is a story that makes all of us feel good. But when it comes to “going green” being financially viable, these guys are where the rubber hits the road. SourceCorp has been providing LIFO accounting services to dealerships for over 25 years, and now offers green building tax deduction analysis and certification to help dealers get the maximum tax advantages for green building practices.
A special thanks to Doug Morrell, SourceCorp’s director of marketing, for introducing us. I was doing a little research on my own, and “cold called” Doug, and he immediately put me in touch with Chris and Matt, who had so much information to share that it made my head spin. It’s always best to get information straight from the horse’s mouth, so I encourage anyone interested in learning more, to contact Matt and Chris directly. I’ve included their contact info below.
Here are some key takeaways from our conversation:
The Best Dealership Candidates for the 179D Tax Deduction
The 179D Tax Deduction offers a tax deduction of up to $1.80 per square foot for improving the energy efficiency of your existing commercial buildings or designing high efficiency into new buildings. The Energy Policy Act of 2005 includes a tax deduction for investments in “energy efficient commercial building property” designed to significantly reduce the heating, cooling, water heating, and interior lighting energy cost of new or existing commercial buildings. The deduction applies for the years 2006, 2007, and 2008, and it’s expected that it will be extended. So, dealerships built within the past three years will most likely be eligible simply due to general environmental improvements in building practices over the past few years.
What do older dealerships do? While making environmental upgrades does come with a cost, Chris noted that it’s negligible - at a 3-5% premium, and will pay off in the long run. As a marketer, I know that going green can also pay off handsomely in great marketing and PR for the dealership in the short run. Let your customers and local news agencies know your dealership cares about the environment and is doing it’s part to save energy, reduce waste, and create a healthier environment – both in the store and outside.
Easiest Ways to Go Green and Get the Tax Deductions
Lighting
The easiest and least invasive way for dealerships to implement environmental upgrades is with lighting. LED lighting technology, in particular, is leading the way in environmentally sustainable lighting. There’s more upside for bigger dealerships, as the deduction is measured in watts per square foot, with a $0.60 per square foot savings applied. However, even smaller stores can reap rewards in terms of energy cost savings.
One firm that Chris and Matt recommend for energy efficient lighting is LED Green Power:
LED Green Power
www.ledgreenpower.com
John Regan
Phone: (831) 425-7922
Lindsey Lewis, co-author of the Clean Ops Blog also provided information on lighting in the post: “Going Green: Lighting.”
http://drivingsales.com/blog/cleanopsblog/2008/06/07/going-green-its-the-little-things-part-i-lighting/
LED isn’t the only type of lighting that can qualify; it’s just the most efficient. There are types of fluorescent fixtures, like “T-5” for example, that can help reach the efficiency thresholds outlined in the 179D provision.
HVAC
The next area where dealerships can win environmental benefits and potentially get tax deductions is via their heating, ventilating, and air conditioning systems. Implementing a geothermal heat pump, for instance, can offer a 10% tax credit. These pumps draw heat form the Earth to generate power. Costs for these pumps, as with many other “clean” technologies, are continuing to decrease as they gain wider spread adoption.
Dealers are also utilizing used motor oil as heat oil to reduce their operating costs and increase efficiency. When installing a system, look for a high SEER or EER rating - the higher the number the more efficient the unit.
The Building Envelope
The third area is in the “building envelope” itself. Proper insulation and “low-e” windows can also reduce energy costs and be used to apply for the deduction. Increasing the insulative properties of the ceiling and walls is also an option. This could be as simple as adding thickness of the walls to add more insulation or installing very efficient wall systems like a structural insulated panel. One supplier that can help with this is:
Green-Source Products
1170 Ivanhoe Road
Cleveland, OH 44110
www.greensourceproducts.com/
Joe Westfall
Vice President of Sales & Marketing
Phone: (216) 851-4641
Email: jwestfall@GreenSourceProducts.com
Take the Time to Determine if Your Store Qualifies
With the various pressures dealers are under today to reduce overhead costs, considering every possible tax advantage is worth looking into. And with stories on “going green” flooding the media today, it makes perfect sense for dealerships that have green initiatives to broadcast it as much as possible – just as you do your excellent customer service. Advertise that you’re a green dealership in your print advertisements, window stickers, posters in the store, your website, email campaigns, etc.
I highly recommend getting in touch with the folks at SourceCorp to learn more.
SourceCorp Professional Services: http://www.SourceCorpTax.com
Chris Henderson, Director of Operations
Email: Chris.Henderson@SourceCorpTax.com
Phone: 817.732.5494 x136
Mobile: 817.475.1943
Matt Rader, Green Building Cost Segregation Director
Phone: 817.732.5494 x133
Mobile: 214.762.5198
Email: Matt.Rader@SourceCorpTax.com
Technorati Tags: environmentally friendly dealers, green building practices, Tax Savings
