hoki99 Commercial Casinos Power Plan Behave Tax Possibility

Before the recent economic downturn, commercial casinos collected at the least $30 billion in revenues annually from 2005 through 2008.1 During this period, US casino owners built new facilities and expanded how big is their existing facilities. Consequently of the economic downturn, new US commercial casino construction has come to a screeching halt and casino operators are actually focused on existing facility cost reduction. Increasingly, casino operators are using the EPAct IRC section 179(D) commercial building energy efficiency tax provisions, which have been extended through 2013. EPAct tax deductions can be found for qualifying energy reductions in lighting, HVAC(heating, ventilation, and air conditioning), and building envelope. (Building envelope consists of the building's foundation, walls, roof, windows, and doors, all of which control the flow of energy between the inside and exterior of the building.)

Commercial casinos often encompass hotel resorts, which provide attractive packages of services for their corporate and family customers. Casinos are particularly worthy of EPAct because of their large gaming floors, hotel occupancy rooms, meeting halls, and parking garages. Each of these features typically consumes large square footage and the EPAct benefit features a potential for up to 60 cents per square foot for all the three measures described above. A few of the smallest commercial casinos are about 50,000 square feet some American casinos are generally over 100,000 square feet. Among the largest ones, MGM Grand on the Las Vegas strip is almost 2 million square feet. Hotels themselves are the absolute most favored of Section 179 building category. (See "Hotels and Motels Most Favored Energy Policy Act Tax Properties")

It's common to think about commercial casinos as located in two states Nevada and New Jersey. Although it does work that these two states have the biggest commercial casino revenues, you will find 12 states with commercial casinos in the United States, the other commercial 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 these commitments to energy reduction. Reporting casinos include Boyd Gaming Corporation, Harrah's Entertainment, Inc., and MGM Mirage. They have projects such as significant energy savings via cogeneration, ERV(energy recovery ventilation), more effective HVAC units, replacing incandescent lights with energy efficient lightings, windows with energy efficient day lighting systems, solar thermal storage and numerous other energy saving initiatives.

The underlying rule set to qualify for the Section 179D lighting tax deduction makes casinos and particularly casino hotels the most favored property category for the tax incentive. The rule set requires at the very least a 25% watts-per-square foot reduction as compared to the 2001 ASHRAE (American Society of  hoki99 Heating Refrigeration and Air Conditioning Engineers) building energy code standard. Full tax deduction is achieved with a 40% watts-per-square foot reduction set alongside the ASHRAE 2001 standard. The ASHRAE 2004 hotel/motel building code standard requires 40% wattage reduction, meaning that any hotel or motel lighting installation that fits that building code requirement will automatically qualify for the most EPAct tax deduction.

For other building categories, the Section 179D tax provisions require compliance with the bi-level switching requirement. The comparison is obviously predicated on wired rather than plug-in lighting. Casino hotel occupancy rooms have an important advantage in they often use plug-in lighting, and because these rooms function as hotel and motel spaces, they are specifically excluded from the tax bi-level switching requirement. Since occupant rooms are often one of many larger spaces in hotel casinos, casinos are normally able to use energy efficient lighting to generate large EPAct tax deductions for the facility. Casinos often have large kitchen, storage, and laundry (so called back of the house) spaces which have historically used T-12 fluorescent lighting. This lighting is so energy inefficient compared to today's lighting products so it will be illegal to manufacture in the United States after July 1, 2010.4 Once manufacturing of these prior generation lighting products ceases, the cost of replacing these inefficient bulbs will increase. Simply stated, casinos must look into acting now to displace these lighting fixtures to truly save both energy and lamp replacement costs. The EPAct lighting tax incentive can be utilized to address the opportunities related to these legally mandated product changes

These areas of casinos have historically used designer type lighting that is energy inefficient and often very costly to steadfastly keep up and replace. Particularly, replacing bulbs and lamps in high ceilings is very costly since expensive mobile hydraulic platform equipment must be rented or purchased to handle the replacements. New lighting products and, particularly, light emitting diode (LED) products, use a fraction of the power and have a much longer useful life and are now being substituted. The mixture of large energy cost reduction, operating cost reductions, utility rebates and EPAct tax deductions can greatly enhance the economic payback from these more expensive lighting upgrades. Many casinos have large adjoining parking garages that may save substantial energy costs and generate large tax deductions by upgrading to energy efficient fixtures. In Notice 2008-40 issued March 7th, 2008, the IRS announced that parking garages are a property class that is specifically eligible to use the EPAct tax deductions. Also, parking garages are excluded from the tax bi-level switching requirement. Please begin to see the September, 2008 International Parking Institute article dedicated to parking garages EPAct lighting deduction tax opportunities.5

Among the biggest energy users on hotel gaming floors is slot machines. Although they certainly were early adapters of fluorescent technology, even these energy efficient bulbs normally need to be changed 3 times annually due to 24/7 operating hours. Due to the high labor maintenance costs, casino owners are actually transitioning to LED technology in their slot machines. LED's, while they have higher at the start costs, have high energy efficiency and much longer life cycle, offering significant savings in labor and maintenance costs. Casinos for their typical 24 hour occupancy can perform significant energy cost savings from energy efficient HVAC systems. Particularly, Nevada's hot climate further makes energy efficient HVAC a very worthwhile investment. Fortunately. Nevada with the greatest revenues from casinos has America's second highest capacity for energy efficiency through renewable geothermal energy.6 Certain kinds of very efficient HVAC investments will often qualify for the HVAC EPAct tax incentive including geothermal and thermal storage.