Back to News

Reroofing Tax Incentive

If you’re a roofing contractor, you should tell your small business customers about a new tax write off they could get for your services.

The Tax Cuts and Jobs Act expands the definition of qualified real property eligible for full expensing under Section 179 of the tax code to include improvements to nonresidential roofs. Qualifying property now includes “improvements to nonresidential real property placed in service after the date such property was first placed in service: roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems.”

In English, that means qualifying taxpayers (typically small and mid-sized businesses) may write off improvements to nonresidential roofs in 2018 and the future, including full reroofs of existing buildings, in the same year of the purchase rather than recover the costs over a 39-year depreciation cycle under the old rule.

The new law also significantly expands the expensing limits, with the maximum amount a business may expense now set at $1 million and the phase-out threshold increasing to $2.5 million.

This is a major victory for small business owners and the National Roofing Contractors Association (NRCA), which has been educating lawmakers for years about the economic benefits of improved tax treatment of roofs.

The change should be good news for you as well. It certainly gives you a valid reason to contact potential customers and tell them about the new rules and how you can help them with their roofing needs. Consider reaching out through phone calls, e-blasts, direct mail, door hangers, advertising and more. If you’re a member of the NRCA, they even have a template letter you can use to get started. A small investment could land you a lot of business.

To read the full Tax Cuts and Jobs Act, click here.