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August 29, 2014

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Sales of green products brisk as tax season nears

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Steve Marcus

Marsha Grigsby, a specialty manager, shows a tankless water heater to John Grzenia last week at a Home Depot at 4195 S. Fort Apache Road. As the end of the year draws near, consumers are taking advantage of federal tax credits offered for energy-efficient products.

Black Friday may come but once a year, but green has been in for months for many consumers and the home improvement stores where they shop.

The Las Vegas Valley has been more heavily affected than most other major urban areas by the cratering of the housing market and the continuing rise of unemployment, and as a result overall sales at home improvement stores have been down.

But there have been a few bright spots, among them the energy efficiency and weatherization products that are eligible for tax credits.

Especially popular here are eligible windows and doors, which can significantly cut winter heating and summer cooling bills, said Marcia Grigsby, an assistant store manager of a Home Depot near Flamingo and the 215 Beltway.

Taking energy efficiency seriously

Replacing leaky windows and doors can mean major savings in an area where most homeowners have little control.

“Once people find out how much savings they can get and understand the program, they realize they can get the $1,500 tax credit and they realize that can go a long way,” she said. “A lot of people come in for items like water heaters without even realizing they can get the tax credit. They’re overwhelmed that they can get money back. In many cases they’re buying more energy-saving items with the money they’ll get from the tax credit. They’re willing to invest to save money over that longer time frame.”

Area Lowe’s stores also stock numerous items that qualify for the tax credit, but the corporation would not allow employees to discuss sales figures or the success of specific items. Gregory Smith, manager of the Lowe’s on Craig and Losee roads, did say that energy-efficient products in general — such as windows, water heaters and insulation — are popular locally.

“There are huge tax incentives for those things,” he said. “When they want to replace something they’re immediately looking for energy-efficient replacements. A few years ago energy-efficient concepts were not taken as seriously as they are in today’s economy, when everybody is trying to save every penny they can. I don’t think that’s a fad.”

Incentives good through 2010

Congress passed the tax credit legislation in early 2009, when the American Recovery and Reinvestment Act created programs aimed at helping people make their homes more energy efficient while stimulating a beaten-down economy.

Qualified appliances, insulation, windows and doors have been some of the few bright spots in home improvement in 2009, retailers say. Home Depot’s sales of energy-efficiency products were much higher than expected in the third quarter of this year, the company’s western division spokeswoman Kathryn Gallagher said.

So what qualifies? So many different items that many retailers have devoted Web sites to highlighting all the ones they offer. Some stores have fliers available that highlight tax credit-eligible products as well. In recent months those fliers have been flying off the racks of Home Depot stores, as people try to make the purchase in time to get the credit on their upcoming tax filings, Gallagher said.

Homeowners can get back 30 percent of the cost up to $1,500 for adding certain types of insulation, energy-efficient windows and energy-efficient heating and air-conditioning systems to their homes, according to IRS spokesman Raphael Tulino.

Homeowners can make these purchases through the end of 2010, but retailers say they’re seeing an uptick in purchases in the second half of this year because consumers will get the money back from the feds sooner than if they wait until the new year and have to file for the credit after 2010.

Homeowners can also get a credit for 30 percent of the cost of alternative energy equipment such as solar water heaters, geothermal heat pumps and wind turbines. Those incentives last through 2017.

Save your receipts for the IRS

But it’s not as simple as buying some qualified insulation and waiting for a check to arrive. As with all tax-related systems, paperwork is involved. If you want to get the credit, you need to keep your receipts and print out the certification from the manufacturer stating that the product qualifies. All of this will be necessary in order to fill out the special form — IRS form 5695 — when you file your taxes in a few months. This form will automatically pop up on screen for anyone using an IRS-approved electronic filing system for their taxes. Those who file their taxes on paper will need to get the form from the IRS.

The red tape isn’t keeping the products from selling, though, retailers said. Nationally the standouts have been tax-credit-eligible roofing and water heaters, Gallagher said. Energy-efficient appliances and home improvement products sold much better than Home Depot had expected, according to the company’s third quarter earnings report. Gallagher attributes that success in the second half of the year to the tax credit.

“The credit lasts for two years, but the time to get that purchase in before the end of this tax season is waning,” she said. “If they want to get that money soon instead of waiting a year, now is the time to buy. I think that’s reflected in the sales.”

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