Senators Introduce Bill to Fix Fire Sprinkler/QIP Error
Senators Pat Toomey (R-PA) and Doug Jones (D-AL) have introduced the Restoring Investment in Improvement Act (RIIA; S. 803) which will correct a drafting error contained in Congress’ 2017 re-write of the federal tax code that significantly limited the amount of a money that a property owner can recoup each year from installing a fire sprinkler system. The IAFC is pleased to support this important, bipartisan legislation and urges Congress to pass the RIIA as soon as possible in order to get more fire sprinklers into our communities.
In 2017, Congress passed the Tax Cuts and Jobs Act (P.L. 115-97) which was the first major revision of the federal tax code since 1986. Congress had intended to allow fire sprinkler systems and other quality improvement properties (QIPs) to qualify for an accelerated 15-year depreciation period. This important distinction would allow property owners to recover the cost of a fire sprinkler retrofit installation much faster than the current 39-year depreciation period allows. The 2017 tax reform legislation also would have allowed property owners who installed fire sprinkler systems between 2017 and 2027 to qualify for an even faster recovery of their investment. Unfortunately, a drafting error in the bill itself prevented fire sprinklers and other QIPs from actually qualifying for this important tax incentive. Adjusting the tax code to incentivize the installation of fire sprinkler systems makes especially good public policy sense when looking at the data which show fire sprinkler systems can reduce the death rate in a fire by 87% and confine a fire to its room of origin in 96% of incidents.
S. 803 is a commonsense and cost neutral solution to this drafting error. The RIIA makes an important change to the tax code by creating an incentive for owners of commercial properties to invest in their building’s safety and protect all those who work or do business in their buildings. S. 803 is an important opportunity to help our communities make strides in lowering the fire death rate in the United States. Contact your senators today and urge them to cosponsor the Restoring Investment in Improvement Act (S. 803).