Improved Rules Sought for Energy Efficiency Tax Credit
NAHB has submitted regulatory comments to the Department of the Treasury and the Internal Revenue Service to improve operation of the tax credit program (this link is for NAHB members only) for builders who construct energy-efficient homes.
To qualify for the credit, which was passed by Congress in 2005, a qualified tax-credit rater must certify that the home achieves a 50% reduction in energy use over the 2004 supplement to the 2003 International Energy Conservation Code.
The current rules for the credit effectively establish the Residential Energy Services Network (RESNET) as the only rating network able to certify tax-credit raters. Because this limitation restricts options for builders and increases costs for both builders and raters, NAHB has asked the Treasury to expand the definition of certifiers.
The lack of competition for certifiers has also created some confusion. For example, information on RESNET’s Web site indicated that the IRS required raters to have $500,000 in liability insurance to inspect tax-credit homes. After NAHB confirmed with the IRS that this was not a requirement, association staff met with RESNET representatives to inform them of the problem. RESNET has corrected the information.
Also, while the administrative rules for the tax credit outlined in Notice 2006-27 specify an “equivalent rating network” for certifying the tax credit, the term is not defined. NAHB has recommended that the IRS identify a process through which any qualified organization could be defined as an equivalent rating network, and it is also pursuing this modification with the Department of Energy and the tax-writing committees of Congress.
NAHB has also asked the Treasury to clarify qualifying definitions of the credit to make certain that it applies to homes sold for rental purposes and homes where there is no transfer of ownership after the construction is complete.
For more information on this or other tax issues, click here to access the taxation section on NAHB's Web site; or e-mail Robert Dietz at NAHB, or call him at 800-368-5242 x8285.
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