Business Week reports the manufacture of drywall alone “accounts for 1% of all the energy used by U.S. industry, and thus a comparable percentage of all industry emissions.^1”  An estimated 26% of the waste in a construction landfill is drywall.²

Green Zip® patented technology allows non-load bearing drywall partitions to be removed, relocated and re-used in both new construction and renovation projects.  This is an environmentally responsible and sustainable alternative to demolishing the interior space of buildings.

Using Green Zip® can:

• Reduce the manufacture of new drywall and the associated environmental impact
• Provide a means to comply with local landfill diversion and green building requirements
• Divert tons of drywall from landfills where it can leech poisonous Hydrogen Sulfide, a greenhouse gas, into our air and water as it decomposes
• Reduce carbon emissions associated with the transportation of drywall waste to landfills
• Make healthier buildings by avoiding the dust and noise associated with demolition
• Allow easier access to internal parts of the building to assist in mold mitigation

Green Zip® construction technology is recognized as being eligible for LEED credit by the US Green Building Council (USGBC)

AWARD-WINNING RECOGNITION

The Environmental Protection Agency (EPA) and the American Institute of Architects (AIA) awarded Green Zip Tape the Best New Building Component award in their 2007 Lifecycle Building Challenge.

In 2010, ARCHITECT Magazine [the magazine of the American Institute of Architects] awarded Green Zip its prestigious R+D Award, stating, “It’s hard to get simpler in conception and execution than Green-Zip Tape.  The product is a substitute for the joint-compound tape that has been used between gypsum board panels since the introduction of prefabricated plasterboard in the early 1930s.  The product impressed all three jurors.”

1 – 26% of the waste by weight in a construction landfill is drywall according to NAHB Resource Center; EPA Report by IFC Corp. states 20% by volume.
2 – Business Week, Taking the Heat off Drywall, January 21, 2008 pg 62.

“NO HOUSE SHOULD EVER BE ON ANY HILL OR ON ANYTHING.  IT SHOULD BE OF THE HILL, BELONGING TO IT,
SO HILL AND HOUSE COULD LIVE TOGETHER, EACH THE HAPPIER FOR THE OTHER.”
 — Frank Lloyd Wright

BUSINESS INTELLIGENCE THAT WILL CHANGE THE WAY YOU MANAGE YOUR REAL ESTATE CONSTRUCTION PORTFOLIO

QUANTITATIVE SAVINGS

By changing the drywall tape on your project to Green Zip®, depreciating the cost of non-load bearing walls can be accelerated by up to 34 years

• Commercial buildings and residential rental property have a depreciable life of 39 years and 27.5 years, respectively.  For tax purposes, this applies to the permanent structural elements of the building
• Nonstructural elements have a much shorter recovery period — either five-year or seven-year depreciable
• The IRS ruled that removable drywall partitions classify as nonstructural building elements (i.e. personal property), qualifying them for shorter life depreciation than conventionally installed drywall — 5 years as opposed to 27.5 years (residential rental property) or 39 years (commercial buildings)
• The IRS guidelines allow not only the classification of the demountable drywall partitions as five-year property but also the cost of the glass, doors, frames and other hardware, wall finishes and certain HVAC and electrical components related to the demountable drywall
• The result can be a near-term reduction in tax liability and a meaningful increase in cash flow for the investor/owner of a commercial building or residential rental property in the design, early-stage construction or renovation phase

Green Zip® technology can reduce investors’ near-term tax liability and increase cash flow

For example, say a residential rental building costs $50 Million to build — and $5 million of that is considered “personal” property (i.e not part of the permanent building structure).  The tax paying investor is able to depreciate that $5 million of expense on the property over five years.  The rest of the building cost — $45 million — depreciates over 27.5 years, providing a much slower tax deduction savings (ie a slower rate of return).

Now take that same example — and using Green Zip® — say an additional $10 million in construction expense can now be reclassified as “personal” property.  The tax paying investor is now able to depreciate $15 million of expenses on the property over five years.  On an after-tax basis (assuming a 39% tax rate), the accelerated depreciation on that additional $10 million in expenses would amount to a savings of $3.9 million over 5 years.  In other words, the investor reduced near-term tax liability — and thus increased cash flow — by $3.9 million over the five-year period.  This highlights the powerful benefit of Green Zip and utilizing a Cost Segregation study to properly classify assets in accordance with IRS guidelines.

There is an additional financial benefit to installing Green Zip® drywall partitions.  When the building is sold, the new owner can claim the total amount of the accelerated depreciation identified in the cost segregation study.  This amount (recalculated on the basis of the property’s new purchase price) still includes the demountable drywall partitions and the elements behind them.  This gives the building additional value and may provide the seller with a competitive advantage during the sales process.

IRS AFFIRMED

In 2008, the Commissioner of the IRS signed an agreement designating Green Zip® demountable drywall technology as personal property — not real estate, thus qualifying for tax-based monetary incentives.  When part of the Green Zip® Partition System™, IRS Guidelines allow the glass, doors, frames and other hardware, wall finishes and wall-associated specialties to be classified as personal property and also qualify for the government incentive.

Green Zip® is the only drywall tape that will successfully remove mud compound after it has cured to full hardness.  This was demonstrated for – and captured on video by – the IRS.  It is the only brand that passed the IRS test; the other drywall tapes failed to meet the IRS requirements necessary to treat drywalls as 5-year property for the monetary incentives.^*

In 2014, the IRS published a Private Letter Ruling PLR 110197-13 which concluded that “zip type partitions are tangible personal property for depreciation purposes,” making them eligible for shorter life depreciation.  Drywall partitions installed with the Green Zip technology may be depreciated over five years as opposed to 27.5 years (residential) or 39 years (commercial) for conventional drywall.  The accelerated depreciation achieved with Green Zip® can free up potentially significant cash flow for future investment by tax-paying owners/developers.

* Green-Zip Tape is the only self-adhesive tape licensed to use patent #7197853, #7451577B2 AND other Pending Patents required to assemble and disassemble drywall.  Beware of any tax service making current claims regarding IRS determination that their demountable drywall is personal property.  After a 2008 demonstration before the IRS authorities, they are keenly aware that all other drywall tapes failed to qualify for the incentive after the joint compound had been allowed to dry to near maximum hardness.

ACCOUNTING & LAW FIRMS VALIDATED

In February of 2014, Price Waterhouse Coopers (PWC) highlighted the IRS accelerated depreciation classification ruling (regarding our patented technology) on their website and featured it in their monthly Accounting Methods Spotlight.  That same year, in an article published in Bloomberg BNA Daily Tax Report, David Burton, a tax attorney and partner at the law firm Akin Gump Strauss Hauer & Feld, affirmed the IRS ruling.  After a year long vetting process, the International accounting firm RSM (formerly McGladrey) issued a ringing endorsement in 2015.