By Mark Valentini, Director of Legislative Affairs
PHCC legislative staff is looking through the 700+ page bill to understand its full impact on contractors. Below is what we have learned about the pros and cons of this bill thus far.
PROS AND CONS
What we like:
- There are tax incentives for contractors that perform work improving the energy efficiency of their customers’ homes and businesses, and tax credits have been increased for homeowners and business owners that invest in energy-efficient HVAC systems.
- Restrictions that limited those tax benefits only to those consumers that hired a contractor using apprentices and paying prevailing wage have been lifted, meaning customers can hire whoever they want to do the work and be able to write it off on their tax returns.
- It supposedly streamlines the permitting process for oil and gas exploration, which means we theoretically can start leveraging more American resources to reduce our dependence on foreign oil and reduce energy costs.
- Upon the President’s signage, PHCC will keep you up to speed on how you and your customers can take advantage of these tax incentives.
Tradeoffs that don’t make this legislation worthy of our support:
- There are over $6 billion in taxes on natural gas exploration, and financial incentives for state governments and utilities to initiate or expedite plans to decarbonize their economies. In short, natural gas will become more expensive and Washington has promised state governments they will save money by moving quickly to ban natural gas. Ratepayers’ gas bills will increase.
- Tax incentives for consumers who get a new furnace or A/C unit are much more heavily weighted towards those who install heat pumps and electrify their homes. This means the legislation picks winners and losers. The consumers who get the full tax benefits of improving their homes’ efficiency are those who have the means to electrify their homes. Consumers that swap out their old system for a gas-fired system or electric resistance heat system, even if those systems meet efficiency requirements, will get a lesser credit if they qualify.
- A last-minute deal before this legislation passed the Senate extends the cap on how much you can write off your business losses for the next two years. Any tax benefit you may receive from performing qualified work on improving the energy efficiency of your customers’ properties will be offset by the losses you can’t write off.
The legislative affairs team at PHCC determined that based on the incentives to accelerate energy policies alone was sufficient to warrant our opposition considering the importance of natural gas to both contractors and their customers. That this legislation will prevent contractors from minimizing business losses during a period of grave economic uncertainty makes it even more unpalatable.
Thank you to those members who responded to PHCC’s call to action last week and remember you can have your voice heard again on Tuesday, Nov. 8.
