SECTION 1. PURPOSE

This notice modifies Notice 2006–52, 2006–1 C.B. 1175, and Notice 2008–40, 2008–1 C.B. 725, which clarified and amplified Notice 2006–52. This notice sets forth additional guidance relating to the deduction for energy efficient commercial buildings under § 179D and is intended to be used with Notice 2006–52 and Notice 2008–40. On June 26, 2006, the Service published Notice 2006–52, which provides, among other things, the requirements for achieving a partial deduction under the permanent rule for (1) interior lighting systems, (2) heating, cooling, ventilation, and hot water systems, and (3) the building envelope. Specifically, Notice 2006–52 requires that for a partial deduction (other than a deduction under the interim lighting rule described below), the system must reduce the total annual energy and power costs with respect to the combined usage of the building’s heating, cooling, ventilation, hot water, and interior lighting systems by at least a specified percentage as compared to a Reference Building that meets the minimum requirements of Standard 90.1–2001 ¹ (the energy savings percentages). The energy savings percentages prescribed in Notice 2006–52 were 16 ² /3 percent for each of the three systems.

On April 7, 2008, the Service published Notice 2008–40, which provided alternative energy savings percentages that taxpayers could use to qualify for the partial deduction under the permanent rule. The energy savings percentages provided in Notice 2008–40 are 10 percent for the building envelope and 20 percent for interior lighting systems and heating, cooling, ventilation, and hot water systems.

This notice provides an additional set of energy savings percentages that taxpayers

may use to qualify for a partial deduction under the permanent rule.