The National Roofing Contractors Association (NRCA) strongly supports bipartisan legislation introduced in Congress on May 22 to reform the outdated depreciation schedule for commercial roofs. This legislation, which replaces the current 39-year depreciation schedule with a 20-year schedule, will remove an obstacle in the tax code that limits economic growth in the roofing industry, thus facilitating the creation of an estimated 40,000 new jobs among roofing contractors and manufacturers. It also will benefit millions of small businesses nationwide and advance energy efficiency within the commercial building sector.
NRCA wishes to commend Reps. Tom Reed (R-N.Y.) and Bill Pascrell (D-N.J.) for sponsoring the House bill (H.R. 4740) and Sens. Ben Cardin (D-Md.) and Mike Crapo (R-Idaho) for authoring the companion legislation (S. 2388) in the Senate. NRCA looks forward to working with these and other lawmakers to enact this legislation as the congressional tax-writing committees consider possible changes in tax policy that will help grow the economy and create jobs.
There has been a need for depreciation reform since the depreciation schedule for nonresidential property was increased from 15 to 39 years between 1981 and 1993. The average life span of most commercial roofs is only 17 years, according to a study by Ducker Worldwide. This has caused building owners to delay the full replacement of older, failing roofs in favor of limited, piecemeal repairs. Moreover, building owners who install new roofs before the current 39-year schedule has elapsed are required to depreciate roofs at different schedules, causing paperwork burdens for businesses.
This legislation will rectify this problem by providing the 20-year depreciation schedule for commercial roof retrofits that meet a benchmark energy-efficiency standard. Depreciation reform for energy-efficient commercial roofs will provide significant energy, environmental and economic benefits by reducing energy costs for businesses of all types that install new roofs.
Depreciation reform for commercial roofs enjoys the support of numerous business, labor and energy efficiency groups, including the National Roofing Contractors Association; United Union of Roofers, Waterproofers and Allied Workers; and the Polyisocyanurate Insulation Manufacturers Association. For more information, please contact NRCA’s vice president of government relations Duane Musser, or manager of federal affairs Andrew Felz at (202) 546-7584.