Bonus Depreciation Still Available for Purchases

Printers are advised that there's still time to take advantage of the 50% bonus depreciation provision contained in the federal Jobs and Growth Tax Relief Reconciliation Act of 2003, but time is running out.

The U.S. House of Representatives passed H.R. 4520, the American Jobs Creation Act, on June 17. Passage of the bill, according to NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, Reston, Va., brings the U.S. a step closer to ending escalating trade sanctions by the European Union against American manufacturers.

The bill is a companion to Senate bill S. 1637, the "Jumpstart Our Business Strength" (JOBS) Act, which was passed in May, explains Mark J. Nuzzaco, director of government affairs for NPES. Both bills offer tax relief for American businesses while repealing U.S. export subsidy tax provisions.

However, Nuzzaco adds, H.R. 4520 fails to extend the deadline for the 50% bonus depreciation provision contained in the tax reform packages passed last year. This means that printers must purchase and place new capital equipment in service by the end of this year to qualify for the front-loaded depreciation benefits (tax savings of 30% to 40%).

H.R. 4520 would, however, allow for an extension to 2007 of the Small Business Expensing provision enacted last year. This provision allows businesses to expense up to $100,000 worth of assets rather than depreciating them over several years, NPES explains. The amount of investment qualifying for this immediate deduction phases out when a business's investment exceeds $400,000 in any single year.

The House and Senate plan to work to quickly reconcile their two versions of the legislation.