Industrial Casinos Energy Coverage Act Tax Opportunity

The Casino Environment

Before the current economic depression, commercial internet casinos collected at least $30 billion in revenues annually through 2005 through 2008. 1 During this time period, ALL OF US casino owners built new facilities plus expanded the size of their existing facilities. As a result of the downturn in the economy, brand new US commercial online casino construction has come to the screeching halt plus casino operators usually are now focused on existing facility expense reduction.

The Segment 179(D) Tax Conditions

Increasingly, casino operators take advantage associated with the EPAct IRC section 179(D) industrial building energy effectiveness tax provisions, which have been extended through 2013. EPAct tax deductions are usually available for qualifying energy reductions in lighting, HVAC(heating, venting, and air conditioning), and building package. Joker123 (Building envelope includes the building’s base, walls, roof, home windows, and doors, all of these control the circulation of energy among the interior and exterior of the building. )

The Nature regarding Casino Properties

Industrial casinos often encompass hotel resorts, which offer attractive packages of services for corporate and loved ones customers. Casinos are extremely suited to EPAct because of their large gaming floors, hotel guests rooms, meeting halls, and parking garages. All these features generally consumes large square footage as well as the EPAct benefit contains a possible for up to 60 cents per square foot for each in the 3 measures described above. Some of the particular smallest commercial casinos are about 55, 000 square ft while most Us casinos are generally over 100, 500 square feet. One regarding the largest ones, MGM Grand within the Las Vegas deprive is nearly 2 mil sq ft. Hotels themselves are the most favored of Section 179 building category. (See “Hotels and Motels Most Favored Vitality Policy Act Tax Properties”)

It is common in order to think of industrial casinos as located in two declares Nevada and Fresh Jersey. While it holds true that these two states have got the largest industrial casino revenues, there are 12 states along with commercial casinos in america, the other business casino states usually are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pa, and South Dakota. Members of typically the American Gaming Relationship have publicized several of their commitments to energy lowering. Reporting casinos include Boyd Gaming Company, Harrah’s Entertainment, Inc., and MGM Mirage. They have got projects which usually include significant vitality savings via cogeneration, ERV(energy recovery ventilation), more efficient HVAC units, replacing amoureux lights with cost effective lightings, windows together with energy efficient time lighting systems, sun thermal storage plus numerous other energy saving initiatives.

The underlying rule set to qualify for the Section 179D illumination tax deduction makes casinos and especially casino hotels one of the most favored property category for the taxes incentive. The principle set requires from least a 25% watts-per-square foot reduction as compared in order to the 2001 ASHRAE (American Society associated with Heating Refrigeration in addition to Air conditioner Engineers) creating energy code standard. Full tax deduction is achieved together with a 40% watts-per-square foot reduction in comparison to the ASHRAE 2001 standard. Typically the ASHRAE 2004 hotel/motel building code regular requires 40% wattage reduction, which implies that any resort or motel lights installation that meets that building code requirement will immediately qualify for typically the maximum EPAct duty deduction.

Occupancy Areas

For most other building categories, the Section 179D tax provisions require complying with the bi-level switching requirement. The comparison is always based on ” cable ” rather than plug lighting. Casino resort occupancy rooms have got a major advantage in that they generally use plug-in illumination, and because these kinds of rooms function because hotel and lodge spaces, these are specifically excluded through the duty bi-level switching need. Since occupant bedrooms are usually among the larger spaces in hotel casinos, internet casinos are typically capable to use energy efficient lighting to generate large EPAct duty deductions for the facility.

Back regarding the House Areas

Casinos often have got large kitchen, safe-keeping, and laundry (so called back of the house) spaces that have in the past used T-12 fluorescent lighting. This illumination is so power inefficient compared to be able to today’s lighting products that will it will be illegal to produce in america after July 1, 2010. some Once manufacturing associated with these prior technology lighting products stops, the cost associated with replacing these bad bulbs increases. Basically stated, casinos should consider acting now to be able to replace these illumination fixtures to save lots of the two energy and lamp replacement costs. Typically the EPAct lighting tax incentive can be used to deal with the opportunities related to these lawfully mandated product changes

Ball Rooms, Banquet Rooms and Restaurants

These areas associated with casinos have traditionally used designer kind lighting that will be energy inefficient in addition to often very costly to maintain and substitute. In particular, replacing lights and lamps inside high ceilings is usually very costly considering that expensive mobile hydraulic platform equipment must be rented or even purchased to handle the replacements. Fresh lights and, inside particular, light giving out diode (LED) products, use a cheaper energy and have a lot longer beneficial life and are now being replaced. The mix of large energy cost decrease, operating cost savings, utility rebates plus EPAct tax deductions can greatly improve the economic repayment from these more costly lighting improvements.

Parking Abri

Several casinos have large adjoining parking abri that can save substantial energy expenses and generate huge tax deductions by upgrading to energy efficient fixtures. In Notice 2008-40 issued Mar 7th, 2008, the particular IRS announced that will parking garages are usually a property class that is particularly entitled to make use of the EPAct tax deductions. Also, parking garages are ruled out from the tax bi-level switching necessity. Please see typically the September, 2008 Worldwide Parking Institute article devoted to parking garages EPAct lighting discount tax opportunities. five

Slot Machines and Gaming Floor surfaces

One regarding the biggest vitality users on hotel gaming floors will be slot machines. Although these kinds of were early connectors of fluorescent technological innovation, even these power efficient bulbs normally have to be changed 3 times a yr because of 24/7 operating hours. As a result of high labor upkeep costs, casino owners are now moving to LED technologies inside their slot machines. LED’s, while these people have higher beforehand costs, have high energy efficiency and very much longer life routine, offering significant cost savings in labor in addition to maintenance costs.


Casinos for their standard 24 hour guests can achieve significant energy cost cost savings from cost effective HVAC systems. Particularly, Nevada’s hot climate further makes energy-efficient HEATING AND COOLING a very useful investment. Fortunately. The state of nevada with the highest revenues from casinos has America’s second highest capacity for energy efficiency through renewable geothermal power. 6 Certain classes of very efficient HVAC investments will often qualify for the HVAC EPAct taxes incentive including geothermal and thermal storage space.

LEED Casinos

We be prepared to see even more casinos obtain LEED status. (See LEED Building Tax Options Article7). In 2008, The Palazzo, Las Vegas Casino started to be the largest LEED certified building and something of the very first certified LEED internet casinos in america. 8 Internet casinos and hotels locate that certain groups of frequent vacationers are very serious in staying in services that have clearly demonstrated they usually are dedicated to the surroundings and sustainable design and style. To become LEED certified, a online casino must have the building energy simulation model created by simply a qualified engineer. Modeling is likewise necessary for the EPAct, HVAC and Creating Envelope tax deductions. Qualified tax experts that know exactly how to make typically the adjustments to convert LEED computer designs to EPAct tax deduction models can evaluate LEED models and evaluate if huge tax deductions usually are probable. For instance , the 500, 000 sq . foot LEED online casino that qualifies with regard to the maximum EPAct tax deduction should receive an immediate duty deduction of $900, 000 =(500, 000*$1. 80). Casino owners who understand the particular magnitude of those advantages can use the tax savings to help justify the charges associated with achieving LEED status.