Fire Sprinkler Incentive Act: Making Sure Safety Comes First
Exciting news for small business owners in New Jersey and across the nation who want to install new or retrofit existing fire sprinkler systems. The Fire Sprinkler Incentive Act which passed as part of a federal tax reform package under the Tax Cuts and Jobs Act, makes it easier and more cost-efficient than ever to install fire sprinklers to protect your customers, employees and livelihood.
The National Fire Sprinkler Association (NFSA) and a coalition of fire and safety related individuals and organizations worked for more than 14 years to get this tax incentive passed.
Here are the key provisions of the new tax incentive:
Small Businesses
- Fully expense installation of fire sprinklers under section 179 of the tax code up to a cap of $1 million in each year of expense
- Able to fully deduct interest expenses on loans taken to pay for a sprinkler retrofit.
Larger Entities
- Able to fully expense capital expenses over the next five years
- Starting in 2023, the amount that can be expensed will slowly taper down, allowing more time for large retrofit projects.
“This incentive has been a long time coming, and is a great step forward for the industry,” said David Kurasz, Executive Director of the NJFSAB. “We hope these tax incentives will encourage those who have thought about installing fire suppression systems in their buildings and those who may have delayed upgrading older systems to move forward and put safety first.”
According to NFSA, thousands of lives could be saved by using this incentive to install fire sprinkler systems, particularly in high fire risk properties such as nightclubs, entertainment venues and large public gathering places.
Business owners are advised to speak with a tax professional about the incentive.
Here are some resources for more information:
- NFSA Tax Reform Resources Website
- Federal Fire Sprinkler Tax Incentive Video 1
- Federal Fire Sprinkler Tax Incentive Video 2
- NFSA Tax Incentive Announcement