Tax Benefits of Greenhouse Construction

Requirements

• To qualify for a tax deduction or credit, the greenhouse must meet a number of federal and state requirements for efficiency, construction practices and uses. Greenhouses built or certified by the United States Green Building Council (USGBC) or Leadership in Energy and Environmental Design (LEED) are eligible for tax benefits. Greenhouses that are renovated or updated using energy-saving equipment and practices are also eligible for tax benefits, depending on the level of work that has been done.

Deductions

• Tax deductions are applied to renovated greenhouses, or greenhouses that are made to be more energy efficient. Older greenhouses often contain energy-heavy lighting and heating systems, inefficient windows and other environmentally unsustainable materials. Replacing older bulbs with energy-efficient lighting, installing insulation and other cost reductive practices can qualify a greenhouse for a tax deduction. According to Greenhouse Grower, reducing energy costs for a building by 50 percent can qualify you for a deduction of up to almost $2 per square foot.

Credits

• Tax credits are applied to the purchase of energy-saving devices and technologies used in greenhouses, such as porous insulation, energy-efficient light bulbs, solar heating panels and other environmentally sustainable items for reducing energy use. Tax credits are designed to help greenhouse growers recoup the cost of upgrading to these materials or using them in the initial construction of the building.

Federal and State Taxes

• Most tax credits and deductions applied to greenhouses are offered at the federal level. LEED and USGBC certified greenhouses receive tax benefits through the federal government. State governments sometimes offer further incentives for building an environmentally friendly greenhouse, or renovating an older greenhouse to be more energy efficient. The Database of State Incentives for Renewables and Efficiency has a list of tax incentives offered based on each state's requirements and taxation policies.