Commercial Casinos Energy Policy Act Tax Opportunity


Before the recent economic depression, commercial casinos collected at least $30 thousand in revenues each year from 2005 through 08. 1 During this time period, US casino owners built new facilities and expanded the size of their existing facilities. As a result of the economic depression, new US commercial casino construction has come to a screeching cease and casino operators are now focused on existing facility cost reduction.

The Section 179(D) Tax Convention

Increasingly, casino operators are 토토사이트 검증  taking advantage of the EPAct IRC section 179(D) commercial building energy efficiency tax convention, which have been extended through 2013. EPAct tax reductions are around for getting qualification energy discounts in lighting, HVAC(heating, setting up, and air conditioning), and building package. (Building package consists of the building’s foundation, walls, roof, windows, and doors, all of which control the flow of energy between the interior and exterior of the building. )

The character of Casino Properties

Commercial casinos often cover hotel resorts, which provide attractive packages of services for their corporate and family customers. Casinos are particularly fitted to EPAct for their large gaming floors, hotel occupancy rooms, meeting halls, and parking garages. Each of these features typically utilizes large sq video footage and the EPAct benefit has a potential for about 60 cents per sq foot for all the three measures described above. Some of the smallest commercial casinos are about 50, 000 sq feet while most American casinos are typically over 100, 000 sq feet. One of the largest ones, MGM Grand on the Nevada deprive is nearly 2 million sq feet. Hotels themselves are the most favored of Section 179 building category. (See “Hotels and Motels Most Favored Energy Policy Act Tax Properties”)

It’s quite common to consider commercial casinos as located in two states Nevada and Nj. Whilst it holds true that these two states have the largest commercial casino revenues, there are 12 states with commercial casinos in the united states, the other commercial casino states are: Colorado, The state of illinois, Indianapolis, Iowa, Louisiana, The state of michigan, Mississippi, Missouri, Philadelphia, and South Dakota. Members of the American Gaming Association have publicized some of their responsibilities to energy reduction. Canceling casinos include Boyd Gaming Corporation, Harrah’s Entertainment, Inc., and MGM Mirage. They have projects together with significant energy savings via cogeneration, ERV(energy recovery ventilation), extremely effective HVAC units, replacing incandescent lights with energy efficient lightings, windows with energy efficient day lighting systems, solar arctic 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 bonus. The rule set requires at least a 25% watts-per-square foot reduction as compared to the 2001 ASHRAE (American Society of Heating Refrigeration and Ac Engineers) building energy code standard. Full tax deduction is achieved with a 40% watts-per-square foot reduction in comparison to the ASHRAE 2001 standard. The ASHRAE 2004 hotel/motel building code standard requires 40% wattage reduction, which means that any hotel or lodge lighting installation that meets that building code requirement will automatically qualify for the most EPAct tax deduction.

Occupancy Rooms

For most other building categories, the Section 179D tax convention require complying with the bi-level switching requirement. The comparison is always based on wired rather than plug-in lighting. Casino hotel occupancy rooms have a major advantage in that they often times use plug-in lighting, and because these rooms work as hotel and lodge spaces, they are specifically omitted from the tax bi-level switching requirement. Since occupant rooms are usually one of the larger spaces in hotel casinos, casinos are typically able to use energy efficient lighting to generate large EPAct tax reductions for the facility.

Back entrance Spaces

Casinos often have large kitchen, storage, and washing (so called back of the house) spaces that have in times past used T-12 fluorescent lighting. This lighting is so energy dysfunctional compared to today’s lighting products that it will be illegal to manufacture in the united states after Come early july 1, 2010. 4 Once manufacturing of these earlier generation lighting products ends, the cost of replacing these dysfunctional lamps will increase. Simply stated, casinos should look into acting now to switch these lights to save both energy and light replacement costs. The EPAct lighting tax bonus can be used to address the opportunities related to these legally mandated product changes

Ball Rooms, Banquet Rooms and Restaurants

These areas of casinos have in times past used designer type lighting that is energy dysfunctional and often very expensive to maintain and replace. In particular, replacing lamps and lamps in high ceilings is very costly since expensive mobile hydraulic platform equipment must be hired or purchased to handle the substitutes. New lighting products and, in particular, light emitting diode (LED) products, use a fraction of the energy and have a a lot longer useful life and are now being tried. The combination of large energy cost reduction, operating cost discounts, utility rebates and EPAct tax reductions can greatly increase the economic payback from these more costly lighting improvements.

Parking Garages

Many casinos have large next to parking garages that can save substantial energy costs and generate large tax reductions by upgrading to energy efficient fittings. In Notice 2008-40 issued 03 seventh, 08, the IRS announced that parking garages are a property class that is specifically eligible to use the EPAct tax reductions. Also, parking garages are omitted from the tax bi-level switching requirement. Please see the September, 08 International Parking Institute article specialized in parking garages EPAct lighting deduction tax opportunities. 5

Slot machines and Gaming Floors

One of the biggest energy users on hotel gaming floors is slot machines. Although we were holding early adapters of fluorescent technology, even these energy efficient lamps normally have to be changed 3 x a year because of 24/7 operating hours. Due to the high labor maintenance costs, casino owners are now moving to LED technology in their slot machines. LED’s, while they have higher up front 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 do significant energy cost benefits from energy efficient HVAC systems. In particular, Nevada’s hot climate further makes energy efficient HVAC a very worthwhile investment. Fortunately. Nevada with the highest 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 bonus including geothermal and arctic storage.

LEED Casinos

We expect you’ll see more casinos obtain LEED status. (See LEED Building Tax Opportunities Article7). In 08, The Palazzo, Nevada Casino became the largest LEED certified building and one of the first certified LEED casinos in the usa. 8 Casinos and hotels find that certain kinds of frequent travelers are very interested in staying in facilities that have clearly demonstrated they are focused on the surroundings and sustainable design. To become LEED certified, a casino must have a building energy simulation model created by a qualified electrical engineer. Modeling is also required for the EPAct, HVAC and Building Package tax reductions. Qualified tax experts that know how to make the adjustments to convert LEED computer models to EPAct tax deduction models can evaluate LEED models and determine whether large tax reductions are most likely. For example, a 500, 000 sq foot LEED casino that qualifies for the maximum EPAct tax deduction will receive an immediate tax deduction of $900, 000 =(500, 000*$1. 80). Casino owners who understand the magnitude of these benefits can use the tax savings to help rationalize the costs related to achieving LEED status.

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