CHEERS Act
The CHEERS Act would expand the energy-efficient commercial buildings deduction (section 179D) to include energy-efficient draft property—specifically, stainless steel or aluminum kegs, containers, and related commercial tap equipment used to distribute and sell alcohol in restaurants, bars, and entertainment venues. Under the bill, such qualified energy-efficient draft property would be treated as energy-efficient commercial building property for purposes of 179D, provided it meets the same energy-efficiency requirements as other eligible property and is principally used in the hospitality trade. The Secretary would issue regulations to implement the new category, including guidance on rents/leases of the property. The amendment would apply to property placed in service after enactment. In short, the bill aims to encourage investment in energy-efficient draft systems in hospitality venues by making these kegs/taps eligible for the 179D deduction, potentially lowering after-tax costs for owners and operators of restaurants, bars, and entertainment venues.
Key Points
- 1Creates a new category in 179D(d): “Qualified energy-efficient draft property,” which shall be treated as energy-efficient commercial building property.
- 2Eligibility criteria: property must meet the energy-efficiency requirements of 179D(c)(1) (A and B(i)), be used in the normal course of operating a restaurant, bar, or entertainment venue, and be a stainless steel or aluminum container or related commercial tap equipment used for the distribution and sale of alcohol.
- 3Regulatory framework: the Secretary will issue regulations or guidance to administer the new category, including how to handle taxpayers who rent or lease qualified energy-efficient draft property.
- 4Effective date: the amendment applies to property placed in service after the date of enactment.
- 5Policy framing: the bill is titled the Creating Hospitality Economic Enhancement for Restaurants and Servers Act (CHEERS Act), signaling a focus on supporting hospitality industry employment and investment through tax incentives.