September 26, 2022

Private Casinos Vigor Scheme Respond Overtax Ability

Before the recent economic downturn, commercial casinos collected at the least $30 billion in revenues annually from 2005 through 2008.1 During this period, US casino owners built new facilities and expanded the size of their existing facilities. Consequently of the economic downturn, new US commercial casino construction has arrived at a screeching halt and casino operators are now actually centered on existing facility cost reduction.

The Nature of Casino Properties

Commercial casinos often encompass hotel resorts, which offer attractive packages of services due to their corporate and family customers. Casinos are particularly suitable for EPAct because of their large gaming floors, hotel occupancy rooms, meeting halls, and parking garages. All these features typically consumes large square footage and the EPAct benefit includes a potential for 60 cents per square foot for all the three measures described above. Some of the smallest commercial casinos are about 50,000 square feet some American casinos are usually over 100,000 square feet. Among the largest ones, MGM Grand on the Las Vegas strip is practically 2 million square feet. Hotels themselves are probably the most favored of Section 179 building category. (See “Hotels and Motels Most Favored Energy Policy Act Tax Properties”)

It is common to think about commercial casinos as situated in two states Nevada and New Jersey. Whilst it is true that those two states have the biggest commercial casino revenues, you will find 12 states with commercial casinos in the United States, the other commercial casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Members of the American Gaming Association have publicized some of their commitments to energy reduction. Reporting casinos include Boyd Gaming Corporation, Harrah’s Entertainment, Inc., and MGM Mirage. They’ve projects which include significant energy savings via cogeneration, ERV(energy recovery ventilation), more effective HVAC units, replacing incandescent lights with energy efficient lightings, windows with energy efficient day lighting systems, solar thermal storage and numerous other energy saving initiatives.

The underlying rule set to qualify for the Section 179D lighting tax deduction makes casinos and particularly casino hotels probably the most favored property category for the tax incentive. The rule set requires at the least a 25% watts-per-square foot reduction as compared to the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) building energy code standard. Full tax deduction is achieved with a 40% watts-per-square foot reduction compared to the ASHRAE 2001 standard. The ASHRAE 2004 hotel/motel building code standard requires 40% wattage reduction, which means that any hotel or motel lighting installation that fits that building code requirement will automatically qualify for the utmost EPAct tax deduction.

Occupancy Rooms

For other building categories, the Section 179D tax provisions require compliance with the bi-level switching requirement. The comparison is definitely centered on wired as opposed to plug-in lighting. Casino hotel occupancy rooms have a significant advantage in which they Pengeluaran HK  often use plug-in lighting, and because these rooms work as hotel and motel spaces, they’re specifically excluded from the tax bi-level switching requirement. Since occupant rooms are generally among the larger spaces in hotel casinos, casinos are usually able to use energy efficient lighting to generate large EPAct tax deductions for the facility.

Back of the House Spaces

Casinos often have large kitchen, storage, and laundry (so called back of the house) spaces that have historically used T-12 fluorescent lighting. This lighting is so energy inefficient in comparison to today’s lighting products so it is going to be illegal to manufacture in the United States after July 1, 2010.4 Once manufacturing of these prior generation lighting products ceases, the cost of replacing these inefficient bulbs will increase. Simply stated, casinos must look into acting now to displace these lighting fixtures to save both energy and lamp replacement costs. The EPAct lighting tax incentive may be used to deal with the opportunities linked to these legally mandated product changes

Ball Rooms, Banquet Rooms and Restaurants

These regions of casinos have historically used designer type lighting that is energy inefficient and often very expensive to maintain and replace. In particular, replacing bulbs and lamps in high ceilings is very costly since expensive mobile hydraulic platform equipment should be rented or purchased to take care of the replacements. New lighting products and, in particular, light emitting diode (LED) products, make use of a fraction of the vitality and have a considerably longer useful life and are now substituted. The mixture of large energy cost reduction, operating cost reductions, utility rebates and EPAct tax deductions can greatly improve the economic payback from these more costly lighting upgrades.

Parking Garages

Many casinos have large adjoining parking garages that can save substantial energy costs and generate large tax deductions by upgrading to energy efficient fixtures. In Notice 2008-40 issued March 7th, 2008, the IRS announced that parking garages are a property class that is specifically eligible for utilize the EPAct tax deductions. Also, parking garages are excluded from the tax bi-level switching requirement. Please start to see the September, 2008 International Parking Institute article devoted to parking garages EPAct lighting deduction tax opportunities.5

Slot Machines and Gaming Floors

Among the biggest energy users on hotel gaming floors is slot machines. Although they were early adapters of fluorescent technology, even these energy efficient bulbs normally have to be changed 3 times per year as a result of 24/7 operating hours. Due to the high labor maintenance costs, casino owners are now actually transitioning to LED technology in their slot machines. LED’s, while they’ve higher in advance costs, have high energy efficiency and much longer life cycle, offering significant savings in labor and maintenance costs.


Casinos because of their typical 24 hour occupancy can perform significant energy cost savings from energy efficient HVAC systems. In particular, Nevada’s hot climate further makes energy efficient HVAC an extremely worthwhile investment. Fortunately. Nevada with the best revenues from casinos has America’s second highest convenience of energy efficiency through renewable geothermal energy.6 Certain categories of very efficient HVAC investments will often qualify for the HVAC EPAct tax incentive including geothermal and thermal storage.

LEED Casinos

We expect you’ll see more casinos obtain LEED status. (See LEED Building Tax Opportunities Article7). In 2008, The Palazzo, Las Vegas Casino became the biggest LEED certified building and among the first certified LEED casinos in the US.8 Casinos and hotels realize that certain categories of frequent travelers are very enthusiastic about remaining in facilities that have clearly demonstrated they’re centered on the environment and sustainable design. To become LEED certified, a casino must have a building energy simulation model created by a qualified engineer. Modeling can be required for the EPAct, HVAC and Building Envelope tax deductions. Qualified tax experts that know how to make the adjustments to convert LEED computer models to EPAct tax deduction models can evaluate LEED models and determine whether large tax deductions are probable. Like, a 500,000 square foot LEED casino that qualifies for the utmost EPAct tax deduction will receive a sudden tax deduction of $900,000 =(500,000*$1.80). Casino owners who understand the magnitude of these benefits can utilize the tax savings to greatly help justify the expenses linked to achieving LEED status.