The fate of bonus depreciation
December 28, 2011
Until the end of the year, companies can immediately write off 100 percent of a qualifying fixed asset
If Congress elects not to extend the full expensing, the write-off will decrease to 50 percent. President Barack Obama included an extension in his September jobs package, which was ultimately defeated, and lawmakers are yet to make a decision about whether to include it in another tax measure.
According to Monica McGuire, senior director of tax policy at the Washington, D.C.-based National Association of Manufacturers, an extension would benefit both manufacturers and consumers.
"You have customers who want to buy plant machinery and equipment, and you have sellers and manufacturers who want to make it and sell it," she told Bloomberg.
The current bonus depreciation
incentive, which was passed in December of last year, seems to be having the desired effect. According to the news source, business investment in fixed assets
increased 10.7 percent in the first nine months of the year compared to the same period in 2010.
With so much uncertainty about whether an extension of the 100 percent write-off will come to pass, companies and clients are rushing to get contracts signed before the provision's expiry date.