Obama Triples Tax Credits: Stimulus Legislation Adds New Incentives for Energy-Efficient Purchases
© 2009 Door & Access Systems
Publish Date: Spring 2009
Author: Tom Wadsworth
Obama Triples Tax Credits
Stimulus Legislation Adds New Incentives for Energy-Efficient Purchases
By Tom Wadsworth, Editor
On Feb. 17, 2009, when President Barack Obama flew to Denver to sign the historic $787 billion stimulus legislation, who knew that garage doors would be affected?
We certainly didn’t.
The cover story of our winter 2008 issue announced to the industry that President Bush’s “$700 Billion Bailout Benefits Garage Door Sales.” That legislation, signed on Oct. 3, 2008, resurrected the tax credits that had applied to 2006 and 2007. We thought that was great news for our industry.
But four months later, President Obama essentially tripled these tax credits, offering homeowners three times the incentive to buy qualifying insulated garage doors. The credit, in essence, allows homeowners to buy a qualifying insulated garage door for 30 percent off its sale price, up to a maximum discount of $1,500.
Here are the ways that Obama’s new legislation changed the existing tax credits for qualifying garage doors.
• The tax credit now equals 30 percent of the product purchase. The previous credit was only 10 percent.
• The maximum credit for qualifying purchases is now $1,500. The previous cap was $500.
• The tax credits now apply to any qualifying garage door purchase made through the end of 2010. The previous purchase period ended on Dec. 31, 2009.
• The applicable years are now 2009 and 2010. The previous credit applied to 2006, 2007, and 2009. Now, qualifying purchases made in 2006 and 2007 do not count toward the $1,500 cap.
• The required U-factor is now equal to or less than 0.30. Previously, it was 0.35. The required SHGC (Solar Heat Gain Coefficient) for windows is now equal to or less than 0.30. The new legislation thus requires greater energy efficiency.
Note: If you have a customer who purchased a qualifying door between Jan. 1, 2009, and Feb. 17, 2009, the required U-factor for that door is 0.35, since that was the requirement at that time.
These changes are part of the American Recovery and Reinvestment Act (ARRA) of 2009. The Act changes provisions in the Energy Improvement and Extension Act of 2008.
All of the previous provisions of the tax credit remain intact.
• The tax credit is based on the total material cost of the purchase (the cost of installation does not qualify).
• The door must be an insulated residential garage door.
• It must be installed on an insulated garage.
• The door perimeter must have a means to control air infiltration.
• The door must be expected to remain in service for at least five years.
• The garage must be part of the taxpayer’s principal U.S. residence.
• Dealers must provide a Manufacturer’s Certification statement that certifies that the door qualifies for the tax credit.
What To Do
As we reported in our winter issue, dealers would be wise to aggressively promote the tax credit in their markets. How often has the government helped you sell garage doors?
We recommend promoting the tax credits with special advertising materials in newspaper, radio, or TV ads, on your Web site, or on special flyers or signage at your place of business.
Hopefully, the tax credit will do what it is intended to do: stimulate purchases!
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Check It Out Online
• All About ARRA: www.Recovery.gov
• Text of the ARRA: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf (see pp. 208-210)
• Energy Star’s Summary of the Tax Credits: http://www.energystar.gov/index.cfm?c=products.pr_tax_credits
• Energy Star’s Comments About Garage Doors: http://energystar.custhelp.com/cgi-bin/energystar.cfg/php/enduser/std_adp.php?p_faqid=3060&p_created=1175191809
• GarageWowNow Press Release: http://garagewownow.com/tax-credit-09.htm