Executive Insight – Consolidation Appropriations Act and Roofing

Posted by Heather Johnson in Commercial Roofing,Executive Insight,Industrial Roofing,Roofing

15 April, 2016

Executive Insight – Consolidation Appropriations Act and Roofing

roofing-tax-credits

In February, the NRCA issued an update regarding new changes in the tax code that could potentially benefit roofing companies. Congress and President Obama signed into law the Consolidated Appropriations Act which contains the Protecting American from Tax Hikes (PATH) Act this past December.  This bill provides for several tax provisions that have been extended on a permanent basis that will help employers with investment planning and tax credits for their businesses in the future.  So how does this affect us and how do we see it helping our company in the future?

While there are a number of tax provisions in the bill, most of them do not effect us due to federal tax immunity through our S-Corp/ESOP ownership structure.  However, there are several that could definitely benefit the roofing industry and our company in particular.

For instance, the bill extends the Work Opportunity Tax credit. The roofing industry continues to struggle with finding skilled labor. By recruiting from certain targeted groups like veterans and unemployed workers, roofing companies can not only hope to find more field employees but also utilize the incentives offered through the PATH act extension for increased recruitment efforts.

Additionally, another provision of particular advantage to roofers is the permanent endowment for the renewable energy investment tax credit. For commercial structures, the PATH Act contains a two-year extension of the tax deduction for energy-efficient improvements. This provision will certainly help the rooftop solar industry pick up momentum.   Additionally, individual states are sure to begin funding their own credits now that the federal program is permanent.

North American Roofing, as well as other roofing companies, can use this as a potential sales tool. The PATH act allows buildings owners to deduct up to $1.80 per sq.ft. for commercial buildings if the roof replacement reduces energy cost by 50%.  With the “cool” roof energy savings that single-ply membranes like TPO and PVC, this tax credit is sure to encourage building owners to take advantage of it.

As we get closer and closer to election day, it will be interesting to see if this tax credit package will bring further tax reform in 2017. If you are not already involved in a trade organization like NRCA, we encourage you to get involved. Many of these organizations are fighting for laws that help and encourage our businesses.

As always, we invite you to join the conversation. Let us know how you are using these new tax provisions.

Brian Verble, CEO

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