Fire Sprinkler Tax Incentive

National Fire Sprinkler Association

Under Cost Recovery Section 13201, there is a temporary 100 percent expensing, a process known as bonus depreciation. Previously, the costs for sprinkler system installations in commercial structures were depreciated over a 39-year time horizon. Under the new law any sprinkler system in an existing commercial structure that is installed or upgraded from September 27, 2017 - December 31, 2022 can be fully expensed, allowing the property owner to immediately deduct the full cost of the sprinkler system. After 2022 the ability to deduct the cost is as follows: Year 2023 2024 2025 2026 Depreciation 80% 60% 40% 20% 2027 The depreciation schedule is permanently set at 15 years.