Tax reform: what it may mean for architects

AIA is working to make sure any tax reform bill Congress passes reflects architects' core values. 

AIA identified three key areas where this bill contains major risks for the architecture profession.

  • The proposed change to the tax treatment for S Corporations,
  • The proposed elimination of the Historic Tax Credit, and
  • The proposed failure to reinstate the 179D incentive for energy efficient commercial buildings.

About the Impact to S Corporations: According to AIA’s 2016 Firm Survey Report, 57 percent of US architecture firms organize as pass-through entities. The Framework proposes creating a new, lower maximum tax rate for these type of firms at 25 percent. However, the proposal excludes professional services companies, such as architecture firms, from the new lower rate.

About the Historic Tax Credit: We know that the Historic Tax Credit has made an enormous difference in communities across Maine, bringing with it economic revitalization, good design and the protection and restoration of some of our most treasured works of architecture. Unless Congress hears about its impact, the HTC will gone forever.

That’s why it’s imperative that you contact your members of Congress and let them know that the Historic Tax Credit is a vital resource with a proven economic track record that helps communities of all sizes.

About the 179D green building tax incentive: The recently released tax reform bill fails to reinstate the 179D incentive for energy efficient commercial buildings. Lawmakers need to hear from architects about the importance of this provision that has a proven track record of reducing operating costs and making the built environment more sustainable.

We need you to tell your Representative that the tax deduction for energy efficient commercial buildings (179D) is an immensely useful tool that leverages billions of dollars in private capital, resulting in the energy-efficient construction and renovation of thousands of buildings, while creating and preserving hundreds of thousands of jobs. It allows for building owners to claim a tax deduction of $1.80 per sq. ft. of building area to install systems that reduce the total energy and power costs by 50 percent or more when compared with a reference building. The deduction applies to nearly all commercial, high-rise multifamily residential, health care, institutional, public, and educational facilities.

The deduction expired at the end of 2016, and is in danger of being eliminated for good. 

You can make your voice heard now by sending a letter or calling your members of Congress to urge them to protect the Historic Tax Credit and the 179D green building tax incentive, as well as to ensure tax rate fairness for architecture firms. 

Please take a moment to tell your representatives how you feel.

Senator Susan Collins
413 Dirksen Senate Office Building
Washington, DC 20510
(202) 224-2523
Email Senator Collins

Senator Angus King
133 Hart Senate Office Building
Washington, DC 20510
(202) 224-5344
Email Senator King

Congresswoman Chellie Pingree
2162 Rayburn House Office Building
Washington, DC 20515
(202) 225-6116
Email Congresswoman Pingree

Congressman Bruce Poliquin
1208 Longworth House Office Building
Washington, DC 20515
(202) 225-6306
Email Congressman Poliquin

Read the full AIA Report:

Jeannette Schram