Are You Glad Tax Credits are Back?

John G. Swanson
January 15, 2013
THE TALK... | Sales & Marketing, Energy Efficiency

Like most Americans, I spent part of the holidays following the news of the fiscal cliff negotiations. I was relieved when a deal was finally struck, thinking the stage is set for window and door industry growth in 2013, if only Washington can keep out of the way.

With all the discussions focused on tax rates for upper income people and potential spending cuts, however, I didn't give much thought to the potential return of tax credits for windows, doors and skylights.  Apparently, I wasn't alone.  Two weeks after the fact, it has emerged that the American Taxpayer Relief Act of 2012 includes provisions that restore the 2011 homeowner tax credits for purchases of energy efficient products, as well as business tax credits for builders and contractors building or significantly renovating ultra efficient homes.  

So, is this a good thing?  That's our poll question of the week. And we'd like to hear from you. Are you happy with the tax credits? Will the retroactive credits for 2012 create challenges?  Are you one of those in the industry that don't like the tax credits at all?  Do the maximum incentives need to be greater?  Should the industry lobby for credits at 2009 and 2010 levels?  Post a comment below or email me and share your thoughts.


Survey Results as of 01/21/2013 :

The tax credits enacted as part of the fiscal cliff bill:

Need to be larger to have a positive impact





Will have a positive impact on the industry





Will have a negative impact on the industry





Our poll results suggest that for tax credits to be a worthwhile incentive for the purchase of energy efficient windows and doors, they need to be larger.  While most within the industry agreed that the $1,500 credits available in 2009 and 2010 had an impact on the industry, few see the same happening with the $200 maximum credit for windows, or even $500 available for doors and other products.

It will be interesting to see how much enthusiasm there is to push for more.  The American Architectural Manufacturers Association, the Window & Door Association and the Window & Door Dealers Alliance are among the industry groups that have indicated they would like to see the return of tax credits, but the comments we received reflect a lot of industry scepticism about such incentives. 

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There are no new credits. If you have used the credits retroactively, all the way back to 2006), then you have no more energy tax credits with our dear uncle Sam. Those with enough money to spend on home improvements were incentivised by tax credits to go ahead with certain projects. Those without enough money to do home improvement projects are still eligible to forego taking advantage of the tax credits, because they were not enough of an incentive previously, and still today, those same people do not have the money to go ahead with home improvements. New tax credits for those with enough money to spend will actually help because if people with money took advantage of tax credits then, they will certainly do it again. Simply extending unused credits for those who cannot take advantage of them is doing nothing for the industry.

I agree with Tim Walker - this does nothing for the real problem in Washington, which is run-away deficit spending. Deficit spending is holding back the economic growth more than anything else and tax credits to an individual who has the money and would probably spend it anyways only puts more burden on the rest of the taxpayers. Another great analogy that was a big flop is Cash-for-Clunkers. Tax credits to those who could already afford a new car, and the burden is put on the rest of the taxpayers. That program also took hundreds of thousands good used cars off the market thereby increasing the price of cheaper used cars. (which are purchased by lower income families)
I am frustrated with the government trying to "fix" the economy.

I have to agree with Mark. But I have my doubts that anyone in Washington is interested in creating jobs. The penchant for spending money has become a politician's addiction. A tax credit is nice for those who receive it but I don't think it's a major factor in getting someone to spend several thousand dollars on replacement windows. The people who are willing to spend that amount of money would have done it without a tax credit.

Until our government figures out that defecit spending does nothing to create jobs, we won't see a robust economic increase. Are there any companies still in business that spend more money than they bring in? My company has seen an increase in new construction and remodeling already this year and we expect to see a steady increase throughout 2013. My guess is that this increase is due to the resilience of the American people and our ability to adjust to difficult situations. We can't change who is in Washington until the next election but we can keep working hard and do what it takes to be successful.

I'd like to know how a retroactive credit is going to increase sales for 2012. 2012 is done. It's over. You can argue the merits of a tax credit but why make it retroactive? A retroactive credit will not create one job.