Tax Reform and Fire Sprinklers - What You Need to Know

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Update:

On December 4, 2018, the NFSA released a report that the 2018 tax law has a “technical error” that will not allow business owners to write off fire sprinklers until it is resolved.

Here is a snippet from the letter:

Good morning everyone, I hope you're off to a great start of a productive week. I am writing with some breaking news out of Washington, D.C. that impacts the fire sprinkler industry. We now have a bill filed that will fix a technical error and get fire sprinklers back in Section168 (they were left out in the late night filing of the Tax Cuts and Jobs Act.)

 Click here to create an email to your legislators. It's super easy and will allow you to join us as we contact legislators to support this legislative technical correction.

In a nutshell, this is how we are framing our outreach:

We are contacting you (legislators) about the Qualified Improvement Property (QIP) technical error in the 2017 tax bill. 

This error has left business improvements with a 39-year depreciation period rather than the 15 years Congress intended. And, these improvements are now ineligible for bonus depreciation.  

This error hurts businesses seeking to make improvements.Now, they can only write off 2.5 percent of improvements this year - rather than the intended 100% bonus depreciation - resulting in them holding off on making certain improvements or expanding.This devastates not only those businesses, but all those involved with, or who benefit from, improvements. For instance, manufacturers, suppliers, and construction and trade workers. Even firefighters and the public are harmed when renovations -like the addition of fire sprinkler systems and other upgrades - are not made.

We are asking our elected officials to do everything possible to ensure a legislative fix is enacted before the end of this year and would like a response from them on this issue.  

If you have questions, feel free to reach out to me, my contact information is below. 

We appreciate your help in making contact today, you can rest assured that Team NFSA is working daily on this issue. Our team, comprised of me, Jim Dalton, and Andy Quinn, feel optimistic that we can appeal to legislators and successfully get the technical correction. We are also proud to be partnering with our other allied national fire service organizations on this and have asked them to also send the link to their respective membership databases. 

In issues like this, every email and call does get counted. You know that old adage about the squeaky wheel....let's be that today and get the Qualified Improvement Property technical error fixed!



The 2018 tax reform has been the biggest change in tax law in over 30 years.  One of these sweeping changes has affected fire sprinklers for commercial properties.

Part of the legislation was a change in Small Business Section 179 Expensing.



 

Since 1986, small businesses have been able to expense certain purchases such as computers, vehicles, and other equipment up to $500,000.  Now, small businesses can expense up to $1 million, including fire sprinklers.

Fire Sprinkler Expensing -- What you need to know.

Every year, small businesses can deduct $1 million in qualified expenses.  Starting in 2018, fire sprinklers can be written off on taxes.

This is allowed for commercial businesses.  Retrofitting fire sprinklers into residential structures is not included.  This law is permanent and is in full effect now.

The National Fire Sprinkler Association came up with samples to know what to expect in fire sprinkler costs.

Example 1:  Nightclub Retrofit

Space:  7,500 square feet

Cost to install fire sprinklers:  $6.00/square foot.

Total:  $45,000

Under new tax law:  You can write this expense off 100%.

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Example 2:  Bowling Alley

Space:  20,000 square feet

Cost to install fire sprinklers:  $4.50/square feet

Total:  $90,000

Under new tax law:  You can write this expense off 100%.

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