Fighting Fire with Tax Policy

What comes to mind when you think about taxes; online filing software and accountants thumbing through shoeboxes of receipts? If that is all you have in mind, you may be missing a tremendous opportunity to improve your fire department’s capacity and your community’s resilience.

A Win for Fire Safety

Let’s start with the good news! In 2017, Congress passed the first major reform of our tax code since 1986. The Tax Cuts and Jobs Act (TCJA) was a mammoth bill that impacted nearly every aspect of our lives. One of these provisions reclassified fire-sprinkler systems and other automatic fire protection and alarm systems as being eligible for deduction under Section 179 of the tax code.

This means that small businesses like bars and nightclubs can deduct the cost of a fire-sprinkler retrofit installation, up to $1 million, from their taxes. The IAFC had been pushing Congress to make this change since the 2003 Station nightclub fire in Rhode Island.

Securing Section 179-eligibility for fire sprinklers was only half the battle. We need your help informing small businesses of this new incentive.

The IAFC is excited to work with the Congressional Fire Services Institute and the National Fire Sprinkler Association (NFSA) to lead a conversation in April about this new incentive with national business organizations. However, we need your help to raise awareness in your own community! The NFSA has educational resources that you can share with small business owners in your community.

Two Challenges Need Addressing

While the TCJA gave us a great win on fire sprinklers, we need to educate Congress about two other ways that the tax code can increase fire safety and help volunteer and combination fire departments.

The IAFC is urging Congress to create an incentive for owners of commercial high-rise properties (that is, buildings taller than 75 feet) to install fire-sprinkler systems. When drafting the TCJA, Congress intended to accelerate the depreciation schedule for fire-sprinkler systems and other interior property improvements, known as qualified improvement properties (QIPs).

These QIPs were intended to have a depreciation period of 15 years rather than their current 39-year depreciation. However, an unintentional drafting error in the TCJA prevented this change from occurring. Fixing this error is estimated to have no net cost to the federal government and has strong bipartisan support, but it is still difficult to get Congress to act.

The IAFC needs your help to educate Congress about the value of fire sprinklers and urge them to fix the QIP drafting error. Fire sprinklers are one of the most effective ways to save lives in a fire – both firefighters and civilians – so let’s get these simple fixtures in every building across the United States!

Volunteer and combination fire departments continue to worry about the tax liabilities associated with recruitment and retention benefits for volunteers. Since the mid-2000s, the Internal Revenue Service has required fire departments to issue a W-2 for any incentives provided to volunteers. This requirement is burdensome to fire departments and costly to volunteers who must pay income taxes on these incentives.

The IAFC urges Congress to pass the Volunteer Responder Incentive Protection Act (H.R.1241), which would allow volunteers to receive property tax-based benefits and up to $600 in other benefits without those benefits being considered taxable income.

If your agency relies on volunteer firefighters or EMS personnel, we need your help to educate Congress on the value of volunteer responders and the need to reduce the unnecessary burdens that the tax code places on volunteers and their fire departments.

Next Steps

Whether you are already engaged with your members of Congress or have not yet ventured into the political world, now is a great time to get involved:

  • The National Fire and Emergency Services Dinner in Washington in April is an opportunity to meet with your member of Congress’ staff and educate them about the needs of the fire and emergency service.
  • If you are unable to come to Washington, you can contact your Congressional state or district offices to schedule time to meet with your members of Congress or their staff in your community.
  • Invite your member of Congress to your fire station. Getting your members of Congress to actually see your station and meet your personnel is a great way to make the needs of your fire department come alive for them.

Regardless of which method you choose, we need you to add your voice to the discussion. Congress is already developing tax-related legislation, so your help is essential in making sure Congress adjusts the tax code to maximize the support it provides for fire safety and volunteer and combination fire departments.

 

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