BOMA Position
BOMA International fully supports tax incentives that will promote the installation of fire sprinklers in existing buildings. The Fire Sprinkler Incentive Act of 2005, would reduce the depreciation period for sprinklers from the current 39 years to 5 years. BOMA International supports this approach.
Background
Fire safety is a critical building performance issue for BOMA International, its members and their tenants. Providing an incentive to accelerate the depreciation for fire sprinkler systems is a useful tool for encouraging the installation of fire sprinklers in many buildings and will assist in reducing the number of fires in which there is loss of life and property.
The economics of building management are complex. This is true for all buildings no matter what their age. Older structures do have the disadvantage of being designed and constructed under different requirements. Therefore, in older buildings, installation of a fire sprinkler system may not have been included in the initial building specifications. Due to financial obligations, many of which are competing, property owners are often unable to install sprinklers within these older structures. By providing a tax incentive, Congress would make a very positive impact on the places that our tenants and employees work, shop, dine, and relax. This tax incentive would also act as an economic stimulus since it would provide much needed investment in real property and jobs for those who install the sprinkler systems.
According to the National Fire Sprinkler Association (NFSA), fire sprinkler retrofit is very labor intensive – on average about 65 percent of the total cost of retrofit. NFSA also estimates that the average cost of retrofitting a fire sprinkler system in an existing high-rise can range from approximately $2.00 per square foot to $3.00 per square foot. In some parts of the country, some estimates are as high as $10.00 per square foot. A tax incentive would provide some encouragement to overcome this cost impediment.
BOMA will continue to urge Congress to pass this very important tax incentive.
Action Requested
BOMA members are encouraged to contact their Congressional delegations and ask that members of Congress co-sponsor and support the Fire Sprinkler Incentive Act of 2005.