Tax Incentives for the Hotel and Motel Industry
Hotel and Motel owners have three major tax incentives available to them, yet most are not taking advantage and consequently losing money. Blue Coast Savings Consultants is one of the leading firms helping businesses determine if they can save money through any of these programs. The three programs that most Hotels and Motels are missing out on are:
1) Property Cost Allocation
2) Energy EPAct / 179d
3) Property Tax Reduction
Property Cost Allocation
Engineering-based cost allocation identifies opportunities for federal, and in some cases, state tax advantages to owners of commercial industrial real estate by accelerating the depreciation on their property. As an expert in this field, we have performed several hundred studies for large and small hotels across the U.S.
Taxpayers typically depreciate personal property such as equipment and furniture correctly over five or seven years, but they often miss available federal and state tax benefits by depreciating their entire investment in constructing or acquiring a building over 39 years. To do this correctly, one must hire an experienced engineer with a thorough understanding of construction finance. The engineer reviews all blueprints, architectural drawings, and electrical plans to isolate structural and mechanical components from those that are considered personal property in addition to identifying architectural and engineering fees that can be segregated. The resulting cost allocation report will allow a taxpayer to:
- Adjust the timing of deductions thus maximizing tax savings
- Create a complete audit trail to resolve any IRS inquiries
- Capture immediate retroactive savings on qualifying properties
- Reduce real estate tax liabilities significantly
Energy EPAct / 179d
The second program Hotels and Motels miss is the Energy EPAct / 179d. This is a federal deduction available for energy efficiency items placed in service after January 1, 2006. If you upgraded lighting, HVAC, or any part of the building envelope with energy efficient items you are likely eligible for a deduction of up to $1.80 per square foot.
Property Tax Reduction
Probably the most frustrating bill is the property tax bill. Our studies indicate the average Hotel in the United States is being overcharged by 15% on their property taxes. There are many reasons Hotels are overcharged but primarily it is the result of improper assessments by the municipality. If you are a Hotel or Motel owner and are paying property taxes over $50,000 per year, you should have a review completed on your property. Reductions in this area are direct to your bottom line!
If you have not had a thorough review on your facility, especially as it relates to the areas of Property Cost Allocation, Energy EPAct, and Property Tax Reduction, you are likely losing money that should remain in your pocket.
If you are interested in becoming a Blue Coast Savings Consultant Advisor so you can show businesses these significant savings and share in that savings, take the next step. View Our Webinar and learn why Blue Coast Savings is the best Business Opportunity in America right now.