A broad coalition of 31 national organizations representing the construction, manufacturing, aviation, professional services, and distribution sectors has joined the Associated Equipment Distributors (AED) in calling on Congress and President Obama to extend business purchasing tax incentives included in recent economic stimulus legislation.
The American Recovery and Reinvestment Act (ARRA) allows businesses to write off 50 percent of new equipment purchases and permits qualified small businesses to expense up to $250,000. The depreciation bonus and increased small business expensing provisions were included in the ARRA to encourage companies to make new capital investments in 2009. Both incentives expire at the end of the year.
In a letter to congressional leaders and the White House coordinated by AED’s Washington office and sent on Dec. 2, the coalition said that while the depreciation bonus and increased small business expensing levels have had a positive impact, “the depression in capital-intensive sectors of the economy (e.g., construction and manufacturing), lack of access to credit, and general uncertainty about the future of the economy have combined to prevent many businesses from taking advantage of the law and the incentives have not had the chance to fully achieve their intended effect.”
The coalition letter said that in light of recent data from the Bureau of Economic Analysis showing that capital investment increased in the third quarter of 2009 after six quarters of consecutive decline, “Extending the depreciation bonus and higher Sec. 179 expensing levels would help inoculate the economy against a backward slide in business purchasing in the months ahead and enhance the impact and benefits of other job creation legislation (e.g., infrastructure investment).”
The text of the letter with the list of signatories is available at http://www.depreciationbonus.org/pdf-2009/DepreciationBonusExtensionCoalitionLetter-20091202.pdf.
To send an email to President Obama, Treasury Secretary Timothy Geithner, and your congressional delegation on this issue, go to http://capwiz.com/aedaction/issues/alert/?alertid=14424391.
AED has provided more information about the capital investment tax incentives at http://www.depreciationbonus.org.