The Tax Cuts and Jobs Act of December 22, 2017 amended Section 179 to now include HVAC retrofits as a qualifying property improvement. Subject to certain limitations, corporations (taxed separately as C Corps) can now expense 100% of an HVAC equipment replacement for existing buildings in 2019.
This can dramatically change the after-tax benefit of a HVAC change-out. Below is a simple example of a $300,000 chiller replacement project. Note how the after-tax simple payback improves from 5 to 4 years. At the 21% tax bracket, the after-tax cost of a $300,000 chiller replacement for a corporation would be $237,000 (300,000 X .21 = 63,000 in tax savings; 300,000 – 63,000 = 237,000, the real cost of the project)
The changes to Section 179 also apply to rooftops and systems related to fire protection, alarms and security. See this link to learn more:
For flow through entities, such as some LLC’s or partnerships, see the link below to learn how Section 199a can benefit owners: