Stimulus Package Offers Some Hope for Window Film

With so much news lately swirling around energy and the economic stimulus package, it stands to reason that many of these provisions could find their way into window film sales. On February 17th, President Obama signed a $789 billion stimulus bill that includes tax credits for homeowners choosing to make energy-efficient home improvements. Window film is considered an insulation material under the Act, so should homeowners decide to take advantage of this offering, part of the money spent could end up in the pockets of window film dealers, distributors and manufacturers.

Under section 25C of the Internal Revenue Code (I.R.C.), homeowners can receive a 10 percent credit on the costs of "qualified energy efficiency improvements," including solar control window film on windows, doors, and skylights. This tax credit applies to improvements made to a primary residence from January 1, 2009 through Dec. 31, 2009.

Do Your Homework

Window film manufacturers have begun a stimulus plan of their own, urging dealers to help their customers take advantage of these tax offerings. But, before rushing out to promote these options, dealers will need to consult with their manufacturers first, as not all products qualify. Window film products are able to qualify for the tax credit only if the manufacturer certifies that, similar to insulation, the film meets the statutory criteria.

San Diego-based Bekaert Specialty Films issued a press release informing its dealers that homeowners who install the company's Panorama window film on their windows and glass doors are eligible for a credit of 10 percent of the cost, up to $500. CPFilms issued a similar release, explaining that consumers who purchase "most types" of LLumar, Vista, and Gila solar control window film brands from professional distributors or dealers for residential use are eligible for the 2009 tax credit.

Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces the amount of income tax owed. To receive the tax credit, consumers are required to submit IRS Form 5695 with their 2009 Income Tax Return and manufacturers are urging their customers to retain copies of the dealer invoice and a manufacturer's certification statement (CLICK HERE for a copy of form 5695).

On the commercial side of things, a deduction is available to property owners under the Energy Policy Act of 2005 (EPAct), which has been extended for commercial buildings through 2013. The deduction equals the cost of the energy-efficient improvement, with a maximum deduction of $1.80 per square foot.

Other Promising Signs

In addition to tax credits for improvements, an $8,000 tax credit aimed at first time homebuyers and those purchasing primary residences offers some promise of jarring real estate markets back into action. And, if these measures serve to stimulate the market enough, excess new home stocks could begin to dwindle, bringing builders back to life-representing yet another potentially revived customer base. To add to the builder-window film relationship, home builders are eligible for a $2,000 tax credit for a new energy efficient home that achieves 50 percent energy savings for heating and cooling over the 2004 International Energy Conservation Code (IECC) and supplements. At least one fifth of the energy savings must come from building envelope improvements and it is possible that window film could serve a contributing factor.

Stimulus plan aside, some property owners will continue to seek energy improvements, even without tax breaks. Mike Feldman, the Tampa, Fla.-based president of Advanced Film Solutions Inc, says local energy companies are providing a stimulus package of their own.

"Energy costs are rising and our local power companies have just hiked our rates by a huge percentage in January, 2009," Feldman explains. Feldman hopes this will move property owners to improve efficiency. "Solar control window films reduce energy costs by up to 30 percent," he says. "There has never been a better time for our solutions."