The Airborne Act of 2026 adds a new section (45BB) to the Internal Revenue Code creating a business tax credit for indoor air quality work on commercial property, public buildings, and tax-exempt 501(c)(3) properties. The credit covers three buckets: assessments, air-cleaning system upgrades, and HVAC upgrades, with defined per-square-foot rates and enhanced amounts when prevailing wage and apprenticeship rules are met.
The law ties eligibility and technical compliance to ASHRAE standards and directs Treasury (in rulemaking) and the Department of Energy (for a voluntary certification program) to prescribe assessment, upgrade, and certification standards. For owners, designers, and contractors this is a targeted financial incentive to remediate indoor air risks while encouraging energy-efficient ventilation choices; for tax administrators it creates new verification, allocation, and anti‑double‑dipping tasks.
At a Glance
What It Does
Creates section 45BB, a new general business credit that pays out by square foot for qualified indoor air quality assessments ($1/sq ft), qualified air-cleaning upgrades ($5/sq ft), and qualified HVAC upgrades ($50/sq ft), with higher per‑square‑foot amounts ($25 and $250) if prevailing wage and apprenticeship requirements are met. Treasury will write rules for certification and the DOE must establish a voluntary certification program.
Who It Affects
Owners of commercial buildings, public agencies, and 501(c)(3) organizations; designers and firms that may be allocated credits for public or nonprofit projects; HVAC and air-cleaning equipment manufacturers and installation contractors; tax departments that will process the new credit and enforce wage/apprenticeship compliance.
Why It Matters
It channels federal tax incentives toward indoor air interventions that also purport to be energy-aware, creating a revenue-based lever to improve air quality in critical non-residential stock. Because the credit is added to the general business credit regime and includes allocation rules for public property, it changes who can monetize retrofits and raises practical questions about certification, verification, and interaction with other tax incentives.
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What This Bill Actually Does
The bill establishes a new business tax credit (section 45BB) that pays a per‑square‑foot amount for three types of activities: (1) an indoor air quality assessment, (2) installation or repair of an air‑cleaning system, and (3) installation or repair of HVAC systems that improve indoor air and meet specified energy‑conscious design tests. The credit is intended for qualifying property—commercial buildings, public property, or properties owned by 501(c)(3) organizations—and only applies to work performed after December 31, 2026.
Treasury will add the credit to the general business credit schedule.
The bill defines technical eligibility by reference to ASHRAE standards (62.1–2022 and 241–2023) and requires that upgrades be designed to use the Indoor Air Quality Procedure in ASHRAE 62.1–2022 when that procedure is more energy efficient and not more expensive than the alternative ventilation-rate approach. The Secretary (Treasury/IRS) must write regulations that set the minimum standards for assessments and for certifying air-cleaning and HVAC upgrades as ‘‘qualified’’ under the statute.To push higher labor standards, the statute offers an increased credit when both prevailing wage and apprentice‑use rules are satisfied.
The apprenticeship hook requires at least 15% of construction hours be performed by qualified apprentices, subject to applicable apprentice-to-journeyworker ratios. The credit for upgrades is limited to 50 percent of the taxpayer’s expenditures on those upgrades in the taxable year; assessment credits cannot exceed the amounts paid for the assessment.
The statute also reduces a property’s tax basis by the amount of the credit and bars a deduction for amounts counted in the credit to prevent double tax benefits.For projects on public property or for tax‑exempt organizations, the bill allows credits to be allocated under Treasury rules to the person ‘‘primarily responsible for designing the property,’’ effectively enabling designers or other parties to claim the credit instead of the owner. Separately, the DOE must set up a voluntary certification program within 365 days of enactment to certify compliance with the statute’s indoor air quality standards, which creates a federal labeling path that taxpayers can use to demonstrate eligibility.
The Five Things You Need to Know
Per‑square‑foot rates: the statute sets $1/sq ft for qualified assessments, $5/sq ft for qualified air‑cleaning upgrades, and $50/sq ft for qualified HVAC upgrades.
Enhanced rates where wage/apprenticeship rules apply: rates jump to $25/sq ft for air‑cleaning upgrades and $250/sq ft for HVAC upgrades if prevailing wage and apprenticeship requirements are met.
Labor threshold: the apprenticeship requirement generally requires at least 15% of total labor hours on installation work be performed by qualified apprentices, subject to applicable apprentice‑to‑journeyworker ratios.
Spending caps and limits: the credit for upgrades is limited to 50% of a taxpayer’s expenditures on qualified air‑cleaning/HVAC upgrades in a taxable year; assessment credits are capped at the amounts paid for the assessments.
Implementation deadlines and certification: credits apply to amounts paid or incurred after December 31, 2026, and DOE must establish a voluntary compliance certification program within 365 days of enactment.
Section-by-Section Breakdown
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Short title
Names the measure the 'Airborne Act of 2026.' This is purely stylistic but signals the bill’s focus on indoor air interventions across non‑residential property.
Allowance and calculation of the credit
Creates the credit and prescribes how to calculate it: add the applicable amounts for a qualified assessment, any qualified air‑cleaning upgrade, and any qualified HVAC upgrade placed in service during the taxable year. The statute delegates the detailed certification and standard‑setting to Treasury but fixes the per‑square‑foot dollar amounts in statute and adds the higher 'bonus' rates that apply when labor standards are met.
Key definitions for eligibility and scope
Defines critical terms: 'air cleaning system' (filters, cleaners, systems that reduce contaminants), 'qualified indoor air quality assessment' (assessment that meets the regulatory standards), 'qualified air cleaning system upgrade' and 'qualified HVAC upgrade' (both require placement in service after enactment and certification to bring the property into compliance with ASHRAE 62.1–2022 or 241–2023). It also defines 'qualifying property' narrowly to commercial properties, public property, and 501(c)(3) owners.
Standards, limits, allocation, and tax interactions
Directs the Secretary to write regulations for carrying out assessments and certifying upgrades. Sets substantive limitations: upgrades are subject to a 50% annual expenditure cap for the credit, assessment credits cannot exceed assessment costs, the basis of property must be reduced by the credit amount, and deductions are disallowed for amounts included in the credit. It also authorizes Treasury to allow allocation of credits for public and nonprofit property to the party primarily responsible for designing the property, which alters who can monetize the incentive.
DOE voluntary certification program
Requires the Department of Energy, consulting with EPA as appropriate, to establish within one year a voluntary certification program for property owners to certify compliance with the indoor air quality standards referenced in section 45BB(c). This creates a federal pathway for compliance documentation that taxpayers and certifiers can rely on, but the program is voluntary and separate from Treasury’s regulatory certification responsibilities.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Owners of commercial buildings and public properties — obtain a dollar‑per‑square‑foot tax incentive to cover assessments and significant portions of upgrade costs, improving indoor air quality while lowering effective retrofit expense.
- 501(c)(3) organizations (tax‑exempt owners) — while they cannot directly use tax credits, the allocation rules let project designers or other responsible parties claim credits tied to improvements on nonprofit property, making retrofits financially tractable.
- HVAC and air‑cleaning manufacturers and certified installers — increased demand for ASHRAE‑compliant systems and certified installations, especially for projects seeking the enhanced rates tied to prevailing wage and apprenticeship compliance.
- Design professionals and firms — the allocation mechanism for public/nonprofit projects can route credits to designers or the person primarily responsible for designing the property, creating a new revenue stream for design firms that certify compliance.
- Occupants and building managers — indirect beneficiaries through improved air quality and potential reductions in occupant illness and absenteeism when owners elect to make upgrades supported by the credit.
Who Bears the Cost
- Federal Treasury (taxpayers) — the program represents a tax expenditure (revenue foregone) to incentivize upgrades; there is no explicit authorization of offsets in the bill.
- Installers and contractors (especially small firms) — complying with prevailing wage and apprenticeship documentation to unlock higher credit tiers imposes administrative and wage cost burdens that may raise project prices and complicate participation for smaller contractors.
- Property owners — must front upgrade and assessment costs and navigate certification, documentation, and possible basis adjustments; owners who cannot monetize the credit directly (e.g., tax‑exempt entities) must negotiate allocations with designers or third parties.
- Treasury/IRS, DOE, and EPA — must develop and run certification, regulatory, and enforcement programs, which creates administrative workload and coordination obligations without dedicated funding in the bill.
- Manufacturers of lower‑end equipment — may face competitive pressure if statute and regulations favor systems that meet ASHRAE certification and energy‑efficiency tests, effectively raising the bar for eligible products.
Key Issues
The Core Tension
The central dilemma is between creating a strong, measurable incentive to upgrade indoor air (and require higher labor standards when offering bigger benefits) and keeping the credit simple enough to be accessible: generous per‑square‑foot rates and labor hooks encourage high‑quality installations but increase costs, administrative burdens, and verification challenges—potentially reducing participation by small owners and contractors or shifting benefits to parties able to monetize tax credits rather than to the buildings and occupants most in need.
The bill ties tax incentives to technical standards (ASHRAE) and to an energy‑aware design choice (the Indoor Air Quality Procedure in ASHRAE 62.1–2022). That combination aims to avoid encouraging inefficient ventilation increases, but it also creates complexity: Treasury must translate ASHRAE testing and design language into tax‑certainty rules, and regulators will need to define what it means for an upgrade to 'affect' a given square footage.
Those drafting rules will face thorny measurement questions (partial‑floor upgrades, single‑zone vs multi‑zone systems, leased vs owner‑occupied space) that will determine how much credit a project actually receives.
The statute’s enhanced credit tier requires compliance with prevailing wage and apprenticeship rules modeled on existing tax provisions, which strengthens labor standards but raises the per‑project cost and the administrative burden for proving compliance. Small contractors and specialty installers could be priced out of the enhanced tier unless clear transition rules or simplified documentation are provided.
The allocation mechanism for public and nonprofit projects lets non‑owners claim credits, which is practical but may produce unusual contractual structures (designer‑led monetization) and complicate who bears compliance risk and audit exposure. Finally, the bill prevents double tax benefits through basis reduction and denial of deductions, but overlaps with other incentives (state grants, energy tax credits, 179D deductions) will require careful guidance to avoid either inadvertent double‑claims or excessive conservatism that reduces investment takeup.
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