Before the recent economic downturn, commercial casinos in the US generated at least $30 billion annually from 2005 through 20081. Over this period, owners constructed new facilities while increasing existing ones’ size. Following the economic meltdown, however, new US commercial casino construction ceased almost wholly, and casino operators began looking for ways to cut operating costs.
Tax Provisions Under Section 179(D)
Casino operators are taking full advantage of EPAct IRC section 179(D), commercial building energy efficiency tax provisions extended through 2013. EPAct tax deductions can be claimed for energy reduction projects related to lighting, HVAC(heating, ventilation, air conditioning), building envelope (consisting of foundation walls, roof, and windows doors that control energy flow between the interior and exterior of the building), and foundation issues.
How Casino Properties Work (Part 6)
Commercial casinos frequently include hotel resorts that provide attractive service packages for corporate and individual customers. Casinos are excellent candidates for EPAct because of their large gaming floors, hotel occupancy rooms, meeting halls, and parking garages. Each feature typically takes up a significant amount of space and can lead to EPAct savings of up to 60 cents per square footage for each measure outlined above. Some smaller commercial casinos span approximately 50,000 square feet, while most American casinos span over 100,000. Of note is MGM Grand on the Las Vegas strip, which spans almost 2 million square feet – this property also enjoys preference under the Section 179 building category for tax properties (See “Hotels and Motels As the Leading Energy Policy Act Properties”).
Conventionally, commercial casinos have typically been located in Nevada and New Jersey. Though these two states account for the highest commercial casino revenues, there are 12 states with commercial casinos across America; Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania South Dakota are some examples. Members of the American slot77 rtp Gaming Association have made public commitments to energy conservation among themselves. Casinos that reported include Boyd Gaming Corporation, Harrah’s Entertainment Inc, and MGM Mirage. Their projects offer significant energy savings through cogeneration, energy recovery ventilation systems (ERV), more energy-efficient HVAC units, replacing incandescent lights with energy-efficient alternatives, retrofitting windows with daylighting strategies, and installing solar thermal storage solutions, among many other energy-saving initiatives.
Casino hotels and other properties that meet certain qualifying conditions for the Section 179D lighting tax deduction are likely to benefit most from it, according to its underlying rule for qualifying for this incentive. It requires at least a 25% watts-per-square foot reduction compared with the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) building energy code standard – full tax deduction is reached when reaching 40% watts-per-square foot reduction from this standard; any lighting installation meeting this criteria automatically qualifies for maximum EPAct tax deduction.
Most other building categories must meet the bi-level switching requirements following Section 179D tax provisions; this comparison always involves wired lighting rather than plug-in fixtures. Casino hotel occupancy rooms offer one distinct advantage: they frequently utilize plug-in fixtures. These spaces operate as hotel and motel areas, so they are expressly excluded from this bi-level switching obligation. Since occupant rooms tend to be one of the larger spaces within casino casinos, they can utilize energy-efficient lighting to generate significant EPAct tax deductions for their facility.
Casinos often use fluorescent T-12 lighting in large kitchens, storage, and laundry spaces, known as the back of the house, to illuminate these spaces. Unfortunately, due to its inefficiency compared to modern lighting products available today, its production will become illegal after July 1, 2010.4 Once such bulbs cease, costs associated with replacement bulbs may skyrocket. Therefore, casinos should consider quickly replacing these fixtures to save energy and fees as soon as possible using EPAct tax incentives that address such opportunities for product changes legally mandated by law. The EPAct tax incentives provide tax breaks on those investments made related explicitly to legally required product changes made available through EPAct tax incentives that address opportunities related to these legally mandated product changes.
Ball Rooms, Banquet Halls, and Restaurants
Casinos traditionally used designer-type lighting that is energy inefficient and costly to operate and replace. Replacing bulbs and lamps in high ceilings requires expensive mobile hydraulic platform equipment to replace bulbs or lamps; light emitting diode (LED) products have emerged that use much less energy while having much longer valuable lives; many casinos are now opting for these more costly upgrades that come with long term cost savings in energy usage, reduced operating expenses, utility rebates, EPAct tax deductions, utility rebates, utility rebates, and EPAct tax deductions as a return on their investments.
Many casinos boast large adjacent parking garages, which could save substantial energy costs and generate significant tax deductions by upgrading to energy-efficient fixtures. According to Notice 2008-40 released March 7, 2008, by the IRS, parking garages qualify as property classes eligible to use EPAct tax deductions; furthermore, they are exempt from bi-level switching requirements; please see September’s International Parking Institute article explicitly dedicated to EPAct lighting deduction opportunities within parking garages5.5
Slot Machines and Gaming Floors
Slot machines are one of the largest energy consumers on hotel gaming floors, often using fluorescent technology early adopters that need replacing several times annually due to 24/7 operation hours. Casino owners have now begun transitioning their slot machines to LED technology; though initially more costly upfront costs, it offers greater energy efficiency with a much longer lifespan and provides significant labor and maintenance savings over time.
Casinos benefit significantly from using energy-efficient HVAC systems due to their 24-hour operations, making energy efficiency investments an excellent way to cut energy costs and save money on operating costs. Nevada’s hot climate makes energy efficiency investments particularly worthwhile, and this state ranks second nationwide for energy efficiency through renewable geothermal energy capacity – as evidenced by Nevada having America’s second-highest capacity.6 Certain categories of highly energy-efficient investments often qualify for tax incentives under EPAct such as geothermal and thermal storage investments.
LEED Casinos As more casinos pursue LEED certification (please see LEED Building Tax Opportunities Article 7), we anticipate seeing an increasing number achieving LEED status. In 2008, The Palazzo Las Vegas Casino became one of the first LEED-certified casinos in the US and one of the first in North America.8 Casinos and hotels alike have found that specific segments of frequent travelers appreciate accommodations, demonstrating they prioritize sustainable design practices and the environment.8 For casinos to become LEED certified, an energy simulation model created by an accredited engineer must also meet EPAct, HVAC, and Building Envelope tax deduction requirements. Tax professionals trained to convert LEED computer models to EPAct tax deduction models are best equipped to evaluate LEED models and determine whether large tax deductions may be possible. They assume that a LEED casino that meets all EPAct tax deduction criteria receives the maximum EPAct deduction of $900,000. Casino owners who recognize its significance can use these savings as leverage against LEED certification costs.
Renovations at Casino Hotels with Energy-Efficiency Renovations
As casino industry costs shift towards cost reduction due to an economic downturn, casino operators are focusing on energy-efficient renovations as a solution. Thanks to EPAct IRC Section 179(D) tax provisions being extended until 2013, more casinos are taking advantage of tax deductions for lighting, HVAC, and building envelope improvements that reduce energy use – particularly those located within hotels as these properties often feature large gaming floors with multiple occupancy rooms, meeting halls, and parking garages as well as substantial tax benefits of up to 60 cents per square foot making upgrades an attractive proposition within this sector of industry.
Casino Operators’ Green Commitments
Boyd Gaming Corporation, Harrah’s Entertainment Inc, and MGM Mirage have publicly pledged energy-reducing initiatives like cogeneration, energy recovery ventilation (ERV), more efficient HVAC units, and energy-efficient lighting solutions to lower their environmental impact while taking advantage of tax incentives available through EPAct. These projects show significant progress toward mitigating casino environmental impacts while taking advantage of tax incentives offered under EPAct.
Energy Policy Act tax benefits for hotels and motels
Hotels and motels, integral components of many commercial casinos, are among the most advantageous property categories under Section 179D tax provisions. Meeting ASHRAE 2004 hotel/motel building code standard, which calls for a 40% wattage reduction, automatically qualifies light installations to receive a maximum EPAct tax deduction. This makes energy-efficient lighting upgrades highly profitable for casino hotels by significantly saving both taxes and operational costs.
Benefits of Plug-in Lighting in Casino Occupancy Rooms
Tax provisions governing Section 179D deductions typically mandate bi-level switching for lighting; however, casino hotel occupancy rooms offer an advantage as many use plug-in lighting, exempting them from this requirement. Since these rooms tend to be larger spaces in hotels, casinos can utilize this advantage and implement energy-efficient lighting and thus qualify for significant tax deductions under EPAct.
Improvement of Back-of-the-House Spaces
Casinos often boast expansive back-of-house spaces such as kitchens, storage areas, and laundry rooms illuminated with T-12 fluorescent lighting fixtures that have become outdated in America due to their inefficiency. As these fixtures will soon be phased out as legislation mandates changes, casinos should act quickly to replace them with energy-efficient lighting solutions which not only save energy costs. Still, they can also take advantage of EPAct tax incentives for fulfilling legally mandated product changes.
Optimizing Lighting in Ballrooms, Banquet Rooms, and Restaurants
Casino ballrooms, banquet rooms, and restaurants often rely on designer lighting that is energy-inefficient and costly to replace or maintain. By switching to LED products instead, casinos can enjoy substantial energy cost reduction, operational savings, and utility rebates; additional EPA tax deductions make these upgrades even more appealing for the industry.
Energy Efficiency in Casino Parking Garages
Casinos often boast large parking garages with energy-saving potential through energy-efficient lighting fixtures. The IRS has recognized parking garages as property eligible for EPAct tax deductions, making this option even more appealing. Plus, parking garages do not need to comply with bi-level switching requirements to implement energy-efficient lighting solutions successfully.
Switch to LED Technology in Slot Machines
Slot machines, an energy drain on gaming floors, have historically relied on fluorescent technology. Due to labor and maintenance costs associated with frequent bulb changes, casino owners have increasingly turned towards LED technology as an energy efficiency solution with long-term cost savings potential – an attractive prospect for casinos seeking to optimize their gaming floor operations เครดิตฟรี ได้จริง.
Casinos need energy-efficient HVAC systems to stay competitive in today’s casino environment.
Casinos, known for their 24-hour operation, stand to realize significant cost savings by adopting energy-efficient HVAC systems. Nevada’s climate makes such investments all the more worthwhile for casino operators’ energy costs; specific assets like geothermal or thermal storage systems could qualify for tax incentives that provide further financial advantages to casino operators’ bottom lines.
LEED Certified Casinos Are An Emerging Trend
The casino industry has witnessed increasing green movements, with more casinos seeking LEED certification. The Palazzo Las Vegas Casino became one of the first LEED-certified casinos in America, setting an example for others. This trend can be linked to frequent travelers’ preference for environmentally focused facilities designed with sustainable designs; to achieve LEED certification requires building energy simulation models developed by qualified engineers, which also serve as the basis of EPAct tax deduction models, providing additional tax benefits.
Utilizing Tax Savings for LEED Certification
EPA can provide casinos with significant tax deductions that offer funding for LEED certification, making the effort more affordable and sustainable overall. A casino that qualifies for EPAct’s maximum deduction may get immediate tax savings of up to $900,000. Casino owners who recognize its potential can leverage these tax savings to become LEED-certified – creating a more eco-friendly image while improving business operations.
Geothermal Energy’s Role in Casinos
Nevada casinos boast an outstanding capacity for energy efficiency through renewable geothermal energy, tapping the earth’s natural heat source to power HVAC systems and reduce dependence on traditional sources. By qualifying for the HVAC EPAct tax incentive and taking advantage of geothermal energy’s efficiency potential, casinos in Nevada can take strides toward becoming more energy-efficient and environmentally conscious.
Impact of Sustainable Design on Casino Hotels
More casinos are pursuing sustainable design and green building practices to keep up with the growing consumer demand for eco-friendly accommodations. Energy-efficient renovations combined with sustainable design elements can enhance a casino hotel’s image, drawing in environmentally aware travelers while increasing market competitiveness. LEED certification and EPA tax deductions show their dedication to environmental responsibility.
Building Energy Simulation Models Are Key
Building energy simulation models is critical to LEED certification and EPAct tax deductions. These simulation models offer casinos an in-depth view of their energy usage and potential savings from energy-efficient upgrades, giving qualified tax experts a comprehensive picture of a casino’s energy consumption and savings from energy-saving upgrades. Furthermore, qualified tax experts can use this simulation data to predict tax benefits encouraging environmentally conscious decisions such as LEED certification.
Raise Industry Standards: The Largest LEED-Certified Casino
The Palazzo, Las Vegas Casino’s status as the largest LEED-certified building in the casino industry sets an exemplary example for other casinos to follow suit. By adopting sustainable design practices and energy-saving solutions, casinos can play an invaluable role in reducing carbon emissions and environmental impact, helping reduce their carbon and ecological footprint and encouraging others to adopt green practices across their operations. Such initiatives could reshape industry standards while inspiring further adoption of green practices throughout their sector.
Tackling 24/7 Operational Challenges
Casinos’ 24/7 operations pose unique energy consumption and efficiency challenges, but thanks to IRS recognition of the energy-intensive nature of casino facilities, tailored tax incentives under EPAct may help. By investing in energy-efficient solutions, casinos can reduce operational costs while contributing towards creating a more sustainable future.