Senate Offers Bill to Cut Depreciation Schedules

PIA reports that it is supporting legislation that would update depreciation schedules, increase business expensing, repeal the individual alternative minimum tax (AMT), and reform the corporate AMT. If approved, the Small Business Works Act (S.189) introduced by Senator Kit Bond (R-MO) would reduce the depreciation schedule for computer equipment and software to two years.

For the past six years, PIA has supported a bill in the House, sponsored by Reps. Mac Collins (R-GA) and Ben Cardin (D-MD), that would reduce the depreciation schedule for computers and peripheral equipment used in manufacturing from five years to two years.

The provisions on business expensing would increase the amount a small business may expense each year for equipment purchases from the current $24,000 to $50,000. Additionally, the phase-out limitation would be increased from $200,000 to $400,000 for equipment expensing. Both provisions would be indexed for inflation.

The Bond bill would trim the individual AMT by 20% each year until complete repeal in 2006.