Sprinkler tax bill clears hurdle
WASHINGTON - A piece of legislation that seeks to offer tax incentives for the installation of automation fire sprinkler systems has found its Capitol Hill companion in a bill that was introduced in August to the Senate.
S. 566, which was introduced by Sen. Jon Corzine, D-N.J., is now being reviewed by the Senate Finance Committee, where it will likely sit until sometime in September when members of both houses return from summer recess, said Jim Dalton, Director of Public Fire Protection for the National Fire Sprinkler Association, one of the groups lobbying for passage of the bill.
Like its House companion bill, S. 1566 would classify sprinkler systems as five-year property for the purpose of depreciation under federal tax codes. That means a system valued at $100,000 could be depreciated at $20,000 a year for five years, compared to depreciation under the current schedule that occurs over 30 years, industry officials said.
Having a bill also on the Senate side increases the likelihood that the bill could be included to other tax related legislation pushed through the Senate later in the session, Dalton said.
Ã¢â‚¬Å“ItÃ¢â‚¬â„¢s a small thing (compared to what the main tax bill would be) but itÃ¢â‚¬â„¢s big to fire protection and certainly to the sprinkler industry,Ã¢â‚¬Â Dalton said. Ã¢â‚¬Å“It may be a blessing to get it attached to something.Ã¢â‚¬Â
The house version of the bill is currently undergoing a fiscal impact analysis by the Joint Tax Committee, which serves both the Senate Finance Committee and the House Committee on Ways and Means. Members of that group came back with questions about how much of the $5 billion sprinkler market is estimated to be retrofit work - about 25 percent - and how much is estimated to be public projects - about 25 percent of the retrofit work, Dalton said.
As of press time, the House version of the bill had 51 co-sponsors.