Investments in new equipment
supported by Bush’s Economic Stimulus package
Signed into law by President George W. Bush last month,
the Economic Stimulus Act of 2008 has two key provisions that should
help spur sales by capital equipment manufacturers and offers increased
depreciation allowances to recycling and waste firms that purchase new
equipment this year.
The provisions are Sections 102 and 103. Congress.org describes the sections
•(Sec. 102) Increases in 2008: (1) the expensing allowance for depreciable
business assets to $250,000 [Section 179 Equipment Expense]; and (2)
the maximum investment phase-out threshold for such expensing allowance
•(Sec. 103) Increases to 50% (from 30%) the amount of the adjusted basis
of certain depreciable property (e.g., equipment and computer software)
that may be claimed as a deductible expense in 2008.
Jeff Griffis, vice president of DADE Capital Corp., said companies that
purchase equipment in 2008 can expect to enjoy substantial savings via
“The customer can write off $425,000 of their $600,000 purchase the first
year,” he said. “There are details of the program that have yet to be
announced - for example, you can’t expense the $250,000 if you purchase
over $800,000 worth of equipment. This is just a guideline. Purchasers
of equipment should consult with their accountants.
“Again, leased items do not qualify because a lease is a rental,” he
adds. “Equipment must be financed or purchased outright to qualify for
Damon Dedo, sales director for Granutech-Saturn Systems, based in Grand
Prairie, Texas, is pleased with the stimulus package.
“Any time there are tax incentives, it’s a plus,” he said. “These guys
are going to spend money because they know for every dollar spent, that
it is going to cost them a lot less. We were selling equipment before
this benefit package came along and now it allows us to push our customers
along, especially if they know this a finite offering by the federal
When purchasing equipment, many factors are considered before a final
decision is taken.
“Clients should be planning for equipment purchases now so they can benefit
from the tax incentives. It would appear that many or all of our clients
will have an opportunity to gain from this new tax rule. This is great
for people that are prepared and have been holding back on capital equipment
purchases,” said Dedo.