Depreciation Bonus Legislation Introduced by Top Senate Tax Writers

The Associated Equipment Distributors (known to insiders as simply AED) is leading an ad hoc coalition of business groups that is calling on Congress to bring back the depreciation bonus. On June 21, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) led the charge, introducing the Bonus Depreciation Extension to Create Jobs Act (S. 3513). The 50 percent depreciation bonus for new equipment purchases expired at the end of 2009. The Baucus-Grassley bill would reinstate the special tax treatment for equipment purchases made in 2010.
 
Depreciation bonus allows business to recover the costs of certain capital expenditures more quickly than under ordinary tax depreciation schedules. Businesses can use depreciation bonus to immediately write off 50 percent of the cost of depreciable property, which will stimulate investment in small businesses and help create jobs.
 
According to a recent AED member survey, the capital investment incentive had more impact on new equipment purchasing last year than any other aspect of the recent economic stimulus laws (including infrastructure investment).
 
Given strong, bipartisan support for depreciation bonus, there is a better than even chance that the Senate will pass the bill before the end of July. However, lawmakers must hear from business leaders (like you!) that depreciation bonus will have a positive impact on your company and help put people back to work. Visit AED’s grassroots action website and send an email to your elected representatives on Capitol Hill.
 
To learn more, visit Depreciation Bonus.org.